'Can ordinance bring in FDI?': Winter Session look-back

Nazim Khanmoneycontrol.com

The Winter Session of the Parliament, which started on November 24, ended yesterday after conducting 22 sittings. However, even as the Lok Sabha, where the ruling BJP enjoys an absolute majority, recorded one of the most productive sessions witnessed over the past several years, the record in the Rajya Sabha was dismal.

A total of 12 bills were passed by both houses but seven others, including key ones relating to increasing the foreign direct investment cap in the insurance sector, allowing auction of coal mines and making amendments to the companies law, failed to pass muster with the Rajya Sabha.

The 245-member RS, where the BJP has only 45 seats (members are elected on the basis of strength a party enjoys in state assemblies), has provided opposition parties a good hunting ground to oppose its policies, or generally disrupt working of the house based on other non-policy issues.

The recent controversies related to activities of outfits affiliated to the BJP served as a trigger for the opposition to disrupt course of legislative business.

The contrast in the way business was conducted in each houses of the Parliament would serve as a learning exercise for the fledgling government – that perhaps it will either have to rein in activities of bodies affiliated with the BJP or at least have better floor managers in the Rajya Sabha.

According to PRS, 10 out of 22 days, the Lok Sabha worked for more than its scheduled six hours (clocking a total productivity of 98 percent), while the Rajya Sabha worked productively for only 59 percent of the time.

But the failure to pass the insurance, coal and companies bill has led to much simmering within India Inc. After all, the Narendra Modi government was brought with a hope he would cut through policy paralysis that much of the previous government’s tenure was riddled with, and take steps to boost investment in the economy.

Jyotsna Suri, new president of the industry body FICCI, told the Times of India that recent statements and activities of people affiliated with the BJP were diluting the development focus of the government and were uncalled for.

“It is detrimental to the (development) agenda... The government should do some straightening out. It's definitely diverting (focus). It is an irritant,” she told TOI.

Yes Bank boss Rana Kapoor, president of another industry body Assocham, told the newspaper that the government should either look to pass the insurance and coal bills either through an ordinance or by calling a joint session of Parliament.

However, there are several roadblocks associated with either alternative.

For a government to call a joint session of the houses -- which will comprise of 790 members (545 in the Lok Sabha and 245 in the Rajya Sabha) and in which the BJP and its allies would have a majority (336 and 59, totaling to 395), one of the two houses must reject a bill that has been passed by the other.

However, the opposition has been clever to disrupt proceedings of the Rajya Sabha and has not allowed voting to take place or let bills be rejected by it – eliminating the possibility of letting the government call a joint session.

It must also be remembered that as a matter of parliamentary practice, governments have rarely made use of the provision of having bills passed by a joint session. The last time it was done was in 2002 when the Prevention of Terrorism Act was passed.

The second option is that of ordinance -- where a bill is made law using the President’s executive assent -- more viable given governments’ propensity to use it when legislative procedure has slowed down in Parliament.

Despite the fact that the Constitution enables the President to promulgate an ordinance if neither house is in session and only if “circumstances exist, which render it necessary for him to take immediate action”, governments, including the UPA 2, have frequently made use of the provision – the UPA created the UIDAI and passed the Food Security Bill while more recently, the NDA amended the SEBI Act through the route.

Sources told CNBC-TV18 this morning that the Cabinet is meeting this morning to consider promulgating an ordinance on the coal and insurance bills.

But even an ordinance, which has to approved by the President within six weeks of its promulgation and has to be approved by a Parliament in its next session (which convenes at least once in six months, giving an ordinance a total shelf life of about seven and a half months) does not enjoy the same power as a full-fledged Act.

This was pointed out by HT Media editorial director Shobhana Bhartia, who in an interview with CNBC-TV18, wondered how much foreign investment the government can hope to garner in the insurance sector by creating a law through ordinance.

“Will foreign investors come in on the basis on ordinance knowing the government’s weakness in RS?” she asked.

Also read:See continuity in policies with BJP wins: HT’s Bhartia