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This is an archive article published on July 27, 1998

How to block reforms, House style

NEW DELHI, July 26: Consider these: Three years after the Rao Government first proposed to replace the outdated FERA with FEMA and an acc...

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NEW DELHI, July 26: Consider these:

  • Three years after the Rao Government first proposed to replace the outdated FERA with FEMA and an accompanying money laundering act, the bills were finally cleared by the Cabinet Friday evening. This was two drafts and two governments later. But the bills will now begin another long journey, through the Standing Committee of the Finance Ministry before they can be taken up for passage.
  • The Delhi Rent Bill, freeing shops, offices and houses in the Capital to market forces, was passed by Parliament and approved by the President in 1995. Three years later, it is still not law because a few shutdown strikes by traders forced two successive Governments to withhold the necessary notification. An amended bill now awaits approval by the Standing Committee of the Urban Development Ministry.
  • The New Companies Bill restructuring Indian companies was prepared by the United Front Government in 1997 after a year of effort by chartered accountants, lawyers, economistsand other experts. The current government has scrapped the entire document and set up another committee to draft another bill.
  • The Insurance Regulatory Authority Bill, paving the way for private investment in the insurance sector, was approved by the Standing Committee of the Finance Ministry and tabled in Parliament in mid-1997. The BJP did a volte face under pressure from its swadeshi lobby, forcing the Government of the day to withdraw the bill. Now, the same swadeshi lobby has tied the hands of the BJP-led government and the bill has been held back yet again.
  • Seven years after the Narasimha Rao Government initiated the process of reforms, the Indian system remains resistant to change. A seemingly insurmountable wall of powerful vested interests, bureaucratic tangles and political intrigue continues to block legislation vital for the acceleration of the pace of administrative and fiscal overhaul.

    Whether it is the repeal of the Urban Land Ceiling Regulation Act or the Lok Pal Bill or the Women’sReservation Bill, Parliament has repeatedly developed cold feet despite a stated political consensus.

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    Former finance minister Manmohan Singh, considered the chief architect of Indian reforms, candidly admits that he managed to get the process off the ground only because of the financial crisis facing the country when the Rao Government assumed office in 1991. “Once the crisis atmosphere was over, it was back to business as usual,” he said, sadly acknowledging that the pace of reforms in the last two years of his tenure was not as fast as in the first three years.

    The history of the Lok Pal Bill is a telling comment on the dilatory tactics adopted by Parliament to put off a decision on an uncomfortable issue. The Bill has been referred to four different parliamentary committees since it was first introduced in the Lok Sabha way back in July 1977. Twenty one years later, it continues to evade passage because those who control the levers of power cannot reconcile themselves to public scrutiny. Yet, everypolitical party has paid lip service to the Bill.

    Chidambaram’s former OSD, Jairam Ramesh, recalls how difficult it was to get various standing committees to even consider a bill. The standing committee of the Finance Ministry during the tenure of the UF Government, for instance, was headed by Sharad Yadav. “He wouldn’t even call a meeting,” complained Jairam. According to Jairam, if politicians really mean business, it should take only two weeks to push a proposed bill through the standing committees. “In our system, if you get lucky, it takes at least six months,” he said. Singh blames these frustrating delays in instituting change on the absence of a true consensus on the need for reforms. “The sad truth is that Indian politics is not serving the interests of the people in the manner that is needed,” he stressed.

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