India’s attempt to review trade reforms in order to help improve the ‘Ease of Doing Business’ in the country has run into rough weather with the Law Ministry objecting to any external agency being authorised to evaluate existing laws and suggest amendments to them.
Earlier this month, the Law Ministry quoted a 1961 Presidential Order that blocks the hiring of a third party consultant to examine and interpret domestic laws, bilateral and multilateral treaties, or to advise ministries on probable changes in laws, regulations, and circulars.
“In accordance with the Allocation of Business Rules, the Department of Legal Affairs (DLA) is primarily concerned with tendering advice to ministries on legal matters including interpretation of the Constitution and the laws, including the law relating to clearance of goods and conduct of cases,” the DLA conveyed to the Finance Ministry.
“In the said circumstances, the appointment of consultants/ Third Party agents for interpretation/review of laws may tantamount to encroachment upon the domain of DLA,” it said.
In order to implement the WTO Agreement on Trade Facilitation, the Finance Ministry last October issued a Request for Proposal (RFP) for hiring a consultant, which would analyse the reforms undertaken by various ministries to cut down the red tape in the movement of goods across borders.
It wanted the agency to critically measure the progress of reforms, their reach and impact, and suggest changes to help improve India’s ranking in trade facilitation indices. In this process, the agency was to “conduct a comprehensive review of laws and regulations” and “recommend needed amendments”.
However, the proposed terms of engagement did not go down well with the Law Ministry. “This department (Legal Affairs), in its advisory capacity, is concerned with all bilateral and multilateral treaties on legal issues and its impact on domestic law irrespective of the subject allocation,” it said. “As per the allocation, examination of legal issues is to be done only by legally trained personnel. Hence, outsourcing such allocated business to a private agency may not be in accordance with the Allocation.” It has suggested that the RFP be reconsidered “with regard to assigning legal duties to a private agency”.
The RFP, issued on October 30, had scheduled to decide the consultant after the opening of the financial bids on November 27. Sources said it would need to be changed with a curtailed terms of reference.