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Low bill power

Real cost of parliamentary disruption: economic loss due to delay in legislation

Written by M R Madhavan |
August 29, 2012 3:43:35 am

Parliament has been stalled for the sixth consecutive day,and there is no sign of a potential resolution to the deadlock. Less than two years ago,the entire winter session was lost to interruptions as the opposition’s demand for a joint parliamentary committee was not met during that session. The current session has seen some productive work,including discussions on the violence in Assam and the perceived threat in various cities to people from the northeastern states,but little legislative work was done.

Parliament often sits long hours — occasionally even on Saturdays — to make up for time lost to disruptions. Attuned to this,the 15th Lok Sabha has worked for just 73 per cent of the scheduled time,the lowest ever. It has also consistently introduced and passed far fewer bills than planned by the government. For example,the last three sessions had planned for 37,32 and 39 bills to be passed,respectively,but only 10,15 and 12 were passed.

In June 2009,during the inaugural address to the 15th Lok Sabha,the president had listed 13 bills on the government’s task list. Of these,eight were part of the 100-day agenda. Over three years later,not even one of these eight bills have been passed. Three of these bills — related to 33 per cent reservation for women in Parliament and state legislative assemblies,and an increase in such reservation from 33 per cent to 50 per cent in panchayats and municipalities — are still pending in Parliament. Two other bills on regulatory bodies have recently been introduced and are being examined by standing committees. These would establish the national council for higher education and research,which will regulate all higher education other than medicine and agriculture,and the national council for human resources in health,for regulating the education and practice of medical professionals. The concerned standing committees are also examining the food security bill and the public services bill,now popularly known as the citizen charter bill or the public grievances bill. Finally,the proposed amendment to the Right to Information Act,which was to provide for disclosure by the government in all non-strategic areas,has not been introduced till date.

The president’s address had listed five other bills — on the right to elementary education,on land acquisition,rehabilitation and resettlement,on pensions and on communal violence. The first of these was passed in 2009. Indeed,it was the only one of the 13 to be passed. While the next three are awaiting discussion in Parliament,the bill on communal violence has not been introduced.

There are several other important bills in Parliament. The oldest pending bill — the Indian Medical Council amendment bill,1987 — completed a quarter of a century in Parliament this Sunday. The seeds bill was introduced in 2004. It aims to ensure the compulsory registration of all seeds,seed businesses (manufacturers,dealers etc),and prescribes minimum quality norms for seeds sold to farmers. The public-funded intellectual property bill,also known as the Indian Bayh-Dole Act,which provides for the sharing of royalties with scientists working in government establishments,has been pending since 2008. Several bills with implications for financial markets,such as the banking regulation amendment,the insurance bill,the forward contract amendment bill and the micro-finance bill,have been in Parliament in different versions for over half a decade. The companies bill has seen various versions for over 10 years.

Some other bills have been introduced in the current Parliament. The national identification authority of India bill makes the UID system statutory. The Lokpal bill,in its latest avatar,is a year old. The direct taxes code bill revamps the income tax and wealth tax acts. A constitutional amendment bill has been introduced that would enable the imposition of a common goods and services tax. The mines and minerals bill provides for a scheme that would allow competitive bidding while incentivising exploration for mineral deposits — the bill is being examined by the standing committee.

There have been some estimates of loss caused by Parliament being disrupted,based on the annual budget of Parliament. This is an incorrect way of judging the cost. The actual cost is the economic loss caused by the delay in passing important bills and by the insufficient oversight of government functioning. It is difficult to quantify the loss ensuing from the delay in passing various pieces of legislation. However,it is obvious that not implementing many of the above bills would have significant costs for various stakeholders — students and farmers,for instance. If the delay results in slower economic growth,it would also have implications for tax collection. Here’s a sampler: a 1 per cent slowdown in GDP growth amounts to a loss of about Rs 90,000 crore to the economy and about Rs 15,000 crore in tax collections. It is important that Parliament focuses on discussing key bills and passing them with the appropriate amendments,rather than stalling them indefinitely.

The writer is with PRS Legislative Research,Delhi

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