28 November, 2015
The government started with a bang in May 2014 promising to usher in a new economic era and by making some very strong foreign policy moves. Soon after that it appeared to get bogged down in procedural minutiae and the need to keep all stakeholders happy which led to the stalling of its keynote projects of land acquisition reform and other economic reforms. Rule by ordinance seemed to be the order of the day with the government procuring the issuance of ordinances on various legislative proposals such as the increase in foreign direct investment (FDI) in insurance, the Negotiable Instruments Act, and reform of land acquisition. Some of these measures finally crystallized with the passage of the Insurance Laws (Amendment) Act, 2015, while others such as land reform were rolled back with the relevant ordinance being allowed to lapse. The government is now stuck with an unruly opposition that perceives "dissent-by-delay" as an acceptable tactical measure for deploying its current majority in the Rajya Sabha (the upper house of the Indian Parliament). This has led to keynote reforms such as the introduction of an India-wide Goods and Services Tax (GST) being stuck in a legislative logjam. Some also note that implementation of GST would provide a boost of 1-2% to India's GDP.
While the monsoon session of Parliament fizzled out with the GST bill failing to be passed, other important reform-oriented bills too did not see light of day. For instance, the Indian Trusts (Amendment) Bill, 2015 (which provides flexibility to trustees in relation to investment of trust money) and the Consumer Protection Bill, 2015 (which provides for an authority to protect rights of consumers, prevent unfair trade practices and regulate all transactions, including electronic transactions) were introduced in the Parliament and not passed. Further, the Negotiable Instruments (Amendment) Bill, 2015 (to specify territorial jurisdiction of courts for cheque bouncing matters) and the Repealing and Amending (Third) Bill, 2015 (to repeal 293 obsolete laws and to amend 2 other acts) were passed by the Lok Sabha (the lower house of Parliament) but not by the Rajya Sabha. Only 3 laws, namely the Delhi High Court (Amendment) Bill, 2014, and appropriation bills for railways expenditure and other expenditure from the Consolidated Fund of India were passed by the Parliament in the monsoon session1.
However, it has not all been gloom and doom in the past few months. The Prime Minister was well received in his visit to the United States to attend the UN General Assembly session. Along with the Prime Minister's visit to the Silicon Valley and his visits to the Tesla factory and the Facebook headquarters, the Microsoft CEO Satya Nadella announced the providing of cloud-based services from India and the Qualcomm CEO Paul Jacob announced a USD 150million fund for start-ups in India. Recently, Amazon too has announced massive investments into the construction and operation of fulfillment centres in various parts of India. Prior to the Prime Minister's visit, the US Ambassador Richard Verma noted at the 11th Indo-US Economic Summit organized by the Indo-American Chamber of Commerce that India was now the second largest source of FDI in the US and had invested up to USD 15 billion and created up to 91,000 jobs in the US thereby showing the perceptible change towards the US attitude on India – from an outsourcing hub that was taking away US jobs to an important strategic partner with much to contribute in two-way traffic. The US Ambassador further lauded the theme of the summit of taking bilateral trade to USD 500 billion.
¹Judgment dated September 11, 2015 in First Appeal No. 310 of 2015
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Sawant Singh, Partner, Phoenix Legal
sawant.singh@phoenixlegal.in
