NaMo's Ordinances - An urgent national imperative

The Government moving things along via the Ordinance route is the best thing it could have done by way of a New Year present to the nation. Coming alongside its determined push with the bureaucracy, to ease the rigours of doing business in India, while catalysing the 'Make in India' campaign!

With his penchant for acronyms, the Prime Minister has asked bureaucrats to turn away from 'ABCD'- avoid, bypass, confuse, delay, in favour of ROAD (to Success)- responsibility, ownership, accountability and discipline.

Between himself and the Finance Minister, they are making strong efforts to also get the RBI to make some much needed banking reforms, as well as start the interest rates on a downward cycle.

Also, with the start of the GST, hopefully by 2016, a new Finance Sector Law to replace some 60 overlapping ones, the sum total will truly start the second generation economic reforms, and attract huge amounts of foreign capital at last.

There are four Ordinances, coming thick and fast, days after the ruins of the Winter Session of the Parliament. The Opposition, is now deprived of its ability to block legislation via the Rajya Sabha, and has to think on its future strategy again. Agitating on the streets is not going to help it generate more than heat and dust; what with the next Assembly election after Delhi, namely Bihar, not coming before the end of 2015 or even early 2016.

The Opposition is calling the Government undemocratic for using Ordinances and bypassing Parliament, after being roundly out-maneuvered; but has, in effect, brought this upon itself by a disruptive Rajya Sabha strategy that was amateurish, short-sighted, and not thought through with regard to consequences.

When the BJP did its own obstructing during UPA rule, the mathematics stacked up differently. The previous Government was a coalition, without the numbers to push through its agenda via a joint session. Besides, the BJP in Opposition participated in a spirit of bipartisanship for the passage of a number of crucial bills.

The present Opposition stopped any movement on the Insurance Bill for example, even though it had passed through the multi-party Select Committee as required. So, it is not quite a goose and gander equation any longer. The BJP Government is in a stronger position than the UPA ever was, and very determined to see its plans come to fruition.

The Union Cabinet has just approved, and sent to the President of India for clearance, an amended Land Acquisition Act. Projects related to Defence, Rural Infrastructure, Industrial Corridors, and presumably Roads that form part of this thrust, will not need prior consent from affected land owners, nor require the complicated Social Impact Assessment procedures. The enhanced compensation and rehabilitation clauses however have been retained unchanged. This will enable an entire logjam of infrastructure projects to recommence; and provide a fillip to the moribund housing and construction sector. It will also help ease the pressures on much old PSU bank-lending, which is presently in the NPA column.

The Insurance Act raising the FDI component to 49 per cent has also been put to an Ordinance, along with another to permit the auction of Coal Blocks, and yet another to process arbitrations as well. The Insurance business will see billions in foreign investment now, though probably after the joint session of the Parliament passes the Ordinance into apucca law. There is also some concern that the insurance Ordinance does not specify an exit route, in case things do not work out according to expectation.

And the Coal Blocks will now be e-auctioned to provide fuel to the electricity generation plants and other industries, which have been making losses using expensive imported coal for quite a few years now.

The Arbitration Ordinance is to make it convenient for the process to take place in India rather than it being taken abroad routinely, as in the Vodafone case. Large Indian law firms, used to earning humungous fees for long-form arbitration, conducted over several years, charging by the sitting, have predictably begun to grumble that the nine months granted to settle such cases is inadequate. They are also not too pleased with the lump-sum fee requirements in the Ordinance. But the foreign corporations have already welcomed the changes, and see it as part of the ease of doing business promise.

The Modi Government is firmly changing the way vested interest works in this country, while it's going about it. Of the several hundred Ordinances promulgated by the GOI over the years, despite being often in a comfortable position in the Parliament, the BJP has now passed six, for the President to endorse. If this is the only way to push the applecart forward, then so be it!

Courtesy Niti Central

 

 

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