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Business News/ Politics / Policy/  Narendra Modi govt’s reforms agenda may face Rajya Sabha hurdle
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Narendra Modi govt’s reforms agenda may face Rajya Sabha hurdle

As NDA lacks numbers in Upper House, it may call for joint sessions of Parliament for passage of crucial Bills

The coal-blocks ordinance, labour reforms and earlier Bills of Insurance Laws and Factories Act are likely to come up for discussion in Parliament’s winter session that begins in November. Photo: Hindustan TimesPremium
The coal-blocks ordinance, labour reforms and earlier Bills of Insurance Laws and Factories Act are likely to come up for discussion in Parliament’s winter session that begins in November. Photo: Hindustan Times

New Delhi: The Narendra Modi government has hit the reforms button with a slew of policy initiatives, but doubts remain about their execution, given the political constraints the ruling alliance confronts because of insufficient numbers in the Rajya Sabha.

In the past fortnight, the Bharatiya Janata Party (BJP) -led National Democratic Alliance (NDA) has put in place a single-window labour compliance process for industries and a new system to end the so-called Inspector Raj, and deregulated diesel prices.

Most recently on 20 October, it cleared an ordinance to facilitate allotment of coal mines to state-owned companies and retained the option of allowing private miners to compete with the state-owned Coal India Ltd, ending the latter’s monopoly.

The move to resolve the crisis created by the Supreme Court’s cancellation of coal mining licences awarded between 1993 and 2010 may be resisted by opponents of coal mines’ privatization and some opposition parties seeking to retain their support base.

In the case of labour reforms too, employee unions have accused the government of ignoring the interests of workers in seeking to enhance the ease of doing business in the country.

The political hurdles could be harder to skirt.

The Trinamool Congress (TMC) led by West Bengal chief minister Mamata Banerjee, which has 34 members in the Lok Sabha, is of the view that the recent policy decisions by the NDA are anti-poor and is opposed to them.

“The general tendency of this government is to enrich those who are anti-poor. The inspection scheme too will not favour the labourers. Their policies are pro-employer and anti-labour. They are not doing it pronouncedly, but it is happening," said Saugata Roy, senior TMC leader and Lok Sabha member. To be sure, the TMC is yet to take a stand on the ordinance relating to the coal sector. “We have not had a look at the ordinance yet, we will go through it in detail and respond. The issue affects West Bengal," Roy said.

The Congress party and the Left have said that they would bring up the recent policy initiatives when Parliament starts the winter session in November.

“The government’s move to bring in an ordinance on the coal issue is definitely something that will be opposed by the Congress party in the Parliament. Parliament is going to meet in three weeks and we see no need to bring the ordinance without having a debate, without consulting the opposition parties," Anand Sharma, senior Congress leader and spokesperson, said.

“We are going to study the coal ordinance in detail. It is a sensitive area of the economy, and we will respond accordingly," Sharma added.

The Left parties and the trade unions, on the other hand, have criticized the government’s move to ease compliance of labour laws.

“In this country, the labour laws aren’t implemented properly and it is a fact that most of the policies remain on paper. In self-certification, who will ever say that there is something wrong with their organization or industry? We will take this issue up in every available opportunity, including in the Parliament," said A.K. Padmanabhan, politburo member of the Communist Party of India (Marxist).

Padmanabhan, also the president of Centre of Indian Trade Unions (CITU), added that all trade unions are united on the labour issue and it will be taken up with the public.

Some of these decisions may need to be backed by legislation rather than just executive approval.

While the BJP has a clear majority in the Lok Sabha with a total of 282 members, it is the second-largest constituent of the 245-member Rajya Sabha with 43 seats, after Congress which has 68. The government will be dependent on friendly parties as well as opposition parties for all the legislations, which would need the assent of the Upper House.

The next big challenge for the government would be executing the policies that it has announced, said Jai Mrug, a Mumbai-based political analyst. “I think that in order to overcome the hurdle of inadequate numbers in Rajya Sabha, the government will actively consider calling joint sessions of the Parliament to get its important Bills passed. Other option that the government has is to focus more on issues that can be implemented through state departments," Mrug said.

“The BJP government is in a position where it can go ahead with more risky and ambitious policy initiatives. It is not as much about numbers but more about the will, and this government has shown that it can certainly go ahead without worrying much about the repercussions," he added.

Several key pieces of legislation are still awaiting the Rajya Sabha approval. One is the Insurance Laws (Amendment) Bill, which had to be sent to a Select Committee due to a demand by opposition parties.

The Factories (Amendment) Bill and Apprentices (Amendment) Bill, 2014—two key labour reform bills—are also awaiting Parliament’s nod.

While Apprentices (Amendment) Bill, 2014 has been passed by the Lok Sabha and is awaiting the Rajya Sabha’s approval, the Factories (Amendment) Bill still needs to be passed by both houses.

The government will also need to garner support from opposition parties for passage of the constitution amendment Bill necessary for implementation of the goods and services tax.Finance minister Arun Jaitley on 21 October said the government will put forward a revised version of the Bill in Parliament, along with a compensation roadmap, for states that face a possible loss of revenue.

Ratings agency Standard and Poor’s, in a report titled The Shape of Things to Come, said India’s political and economic realities should temper short-term optimism about accelerated economic performance and rapid structural reforms.

“The Modi government is not likely to take dramatic steps to change economic policies, such as privatizing state-owned enterprises and government-owned banks, substantially reducing trade barriers, drastically cutting fiscal subsidies, overhauling archaic labor laws, or lifting restrictions on foreign direct investment in sectors such as retail trade," said the S&P report dated 16 October.

It said Modi would seek to win as many state elections as possible, especially in the next two years, to gain seats in the upper house of Parliament and ease the passage of legislation.

One advantage that the government has is that the cycle of commodity price rises has ended, offering the government an opportunity for better economic management, said Indranil Pan, chief economist at Kotak Mahindra Bank Ltd. “The government has to keep the momentum of reforms, otherwise the positivity created around this government will fizzle out. However, even with the new initiatives of the government, implementation remains the key," Pan said.

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Published: 27 Oct 2014, 11:45 PM IST
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