Home / Politics / Policy /  Modi govt’s key policy flip-flops in past two years

New Delhi: As the National Democratic Alliance completes two years in power, here is a look at some of the major policy flip-flops by the government:

Licensing for genetically modified (GM) seed technology

The government withdrew a notification on licensing of GM seed technology. The agriculture ministry had said that GM technology providers could not deny a licence to any willing domestic seed company and royalties could not exceed 10% of the minimum sale price. It later withdrew this and placed it as a draft for discussion

Tax on Employee Provident Fund withdrawals, interest rate and age limit

The government withdrew a budget proposal to partially tax withdrawals from an employee’s provident fund after the salaried middle class strongly opposed the move.It was also forced to retract it’s decision of lowering the interest rate on employee provident fund to 8.7% from 8.8%. It had to remove the restrictions placed on withdrawal and lower the retirement age to 55 years from 58 years.

Encryption policy

After a backlash, the government withdrew the draft National Encryption Policy that called for users of social media and chatting apps to save their messages in plain text format—a provision that raised concerns of state overreach and violation of individual privacy.

Public Debt Management Agency (PDMA) framework

The government had to go back on its unilateral decision to take away the regulation of government bond markets from the RBI. It even deleted provisions in the finance bill related to setting up of an independent public debt management office. The finance minister announced that the government will work with the RBI in evolving a framework for PDMA.

Minimum alternate tax (MAT) on foreign portfolio investors (FPI)

The government exempted FPIs from levy of MAT after initially stressing that they will have to pay MAT for the period prior to 1 April 2015.

Banning porn web sites

The government ordered banning of 857 porn websites but later scaled down the order limiting it to child pornography websites.

Income tax return forms

The finance ministry notified tedious income tax return forms last year that sought details of bank account balances and expenditure on foreign travel but had to withdraw these forms and bring out a revised simpler income tax return forms after taxpayers expressed outrage.

Capital infusion in state-run banks

In last year’s budget, the government allocated only 7,940 crore towards capitalization of state-run banks. It said that banks should raise money from the markets to meet its capital requirements.

However, following opposition from the Reserve Bank of India (RBI) and the banks and given the low valuations of state-run banks, the government had to rethink its decision and announce a comprehensive 70,000 crore capital infusion plan over a four year period.

Land acquisition act

The government had to drop some of the key changes it proposed to the land acquisition act enacted by the previous Congress government after it faced large scale opposition from parties and farmers over some of the ‘pro-business’ clauses that were proposed in the revised legislation. It also decided not to re-promulgate the ordinance to bring in the changes after having done so thrice within a year.

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