)
Prime Minister Narendra Modi on Saturday told G-20 leaders that economic reforms would face resistance in India and should be delinked from politics.
"There is bound to be resistance to reform, and therefore, it is essential to insulate the reform process from politics. Reform should be an institutionalised process," Modi said at a retreat hosted by Australian Prime Minister Tony Abbott at the Queensland Parliament House, where leaders met without aides shortly before the annual summit of 20 industrialised and major economies.
A slew of reform Bills is expected to come up in Parliament's winter session, slated for a month from November 24. These include amendments to the land acquisition law, constitution amendment Bill on the goods & services tax (GST), a Bill to increase the foreign investment ceiling in the insurance sector from 26 per cent to 49 per cent, and a couple of labour reform Bills.
Finance Minister Arun Jaitley had recently said the government would push amendments to the land acquisition law even if Opposition parties did not support it. He had said changes to remove obstacles in this law were necessary to develop smart cities. "We will first try to reach a consensus and if that is not possible we will go ahead and take the decision," he had said at the India Global Forum summit.
The Constitution amendment Bill on GST requires to be passed by two-thirds majority in both Houses of Parliament and by at least half the states. While the National Democratic Alliance might muster this majority in the Lok Sabha, it needs support in the Rajya Sabha, where it has 58 seats in the 242-member House. A two-thirds majority means at least 161 members will have to vote in favour if there is full attendance.
The chairman of an empowered committee of state finance ministers on GST, Abdul Rahim Rather, recently said the Bill could be easily passed in the Lok Sabha but the ruling coalition would need support of Opposition parties in the Rajya Sabha.
There are a few differences between the Centre and states that are yet to be ironed out. Finance ministers of states met earlier this week but did not receive a revised Cabinet note on the Bill to frame their views. The differences relate to inclusion of petroleum in GST and a constitutional guarantee for compensation to states for any loss after GST is introduced.
A select committee is yet to give its recommendations on the insurance Bill amid differences between parties over the composite cap.
So far as labour reform is concerned, Opposition parties had created an uproar in the Lok Sabha when the Centre introduced amendment Bills for the Factories Act and Apprentices Act in the Budget session in August. The Opposition had demanded the Bills be sent to a parliamentary standing committee. While the Apprentices Act was cleared by the Lok Sabha, it is yet to be passed in the Rajya Sabha.
Apart from these two Bills, the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, which was cleared by the Cabinet in July, is awaiting introduction in Parliament.
These Bills are not on the lines of what were passed by the Rajasthan Assembly. Consultations between the labour ministry, the department of industrial policy and promotion and labour unions are on over proposed relaxation of labour rules in the National Investment and Manufacturing Zones, but nothing has come of it so far.
Modi said reforms could not be done by stealth but had to be people-driven and people-centric. He said reforms should take into account the issues being faced by the people and emphasised these should take into account the root causes of the issues involved. "Only then can reforms be durable and long-lasting," he added.
To buttress his point, Modi cited experiences of farmers often needing cheap power to extract groundwater because water was not otherwise available. He said farmers would no longer require subsidised power if water was made available to them. "The reform process could move forward taking into account root causes," he said.
The prime minister said reforms should lead to simplification of processes and should also involve improvements in governance.
India is often cited as having a tough environment for doing business. In the latest World Bank ranking on the ease of doing business, India has fallen two notches from the previous year - to 142 among 189 countries. At an informal meeting of BRICS nations, Modi said repatriation of black money stashed abroad was a priority for his government and he linked unaccounted wealth to security challenges. Spelling out his agenda for G-20, the prime minister had said in a pre-departure statement highlighting the importance of international cooperation against black money would be a key issue for him. Money stashed abroad has occupied the centre stage of political debate in India and a special investigation team is probing 627 names that figure in an HSBC list given by the government to it. Modi made a strong pitch for speeding up the creation of a BRICS development bank. He exuded confidence the agreement over the financial institution would be ratified by his government by the year-end and 2016 should be set as the target for its inauguration.
India will hold the presidency of the $100-billion New Development Bank, to be based in Shanghai, for the first six years. Modi said his government would soon nominate India's candidate for the post of the presidency.
| FROM THE SIDELINES |
|
