Opposition to key bills may hinder UPA's reform push
Brief duration of winter session compounds issue
With some key bills urgently waiting to be passed to give a desired push to India’s faltering reforms, the winter session of Parliament may be the last opportunity for the government to move ahead with hard policy decisions before the 2014 elections.
However, opposition to almost all legislations and a brief upcoming session are expected to play spoilsport.
To top it all, the uncertainty remains on whether the government is going to survive till 2014 after the renewed threat of Trinamool Congress (TMC) to bring in no-confidence motion against the UPA government come November 22.
As many as seven key economic bills are lined up for passage in the upcoming session for a government which is working against a political calendar. The important ones include the amendment to the insurance bill that seeks to raise FDI cap from 26 per cent to 49 per cent, pension bill that will open the sector to foreign players, the long pending companies bill, land acquisition and Direct Taxes Code bill apart from Lok Pal and others.
The passage of all of these bills are important in order to shore up slowing economic growth and dampened investor sentiment but, there is no consensus among parties for most of these bills. The TMC, Samajwadi Party, Bahujan Samaj Party, Left parties and BJD are all against any move to permit more FDI in insurance and pension.
Only the BJP has no objection with 26 per cent FDI in pension sector. Finance Minister P Chidambaram has sounded optimistic and urged the parties to help the government carry through its “heavy legislative agenda” in the winter session. But the gestures shown by some of the UPA supporters does not herald much hope. To compound the worries, is the brief affair of the winter session with less than 20 effective working days.
Importance of SP
The SP, an outside supporter with 22 MPs in the Lok Sabha, is important for the passage of bills, but its latest decision to release the list of candidates for 2014 Lok Sabha polls much ahead of time, has raised the suspense over its next move.
DMK has yet not made its next move clear. In this scenario, the rally sparked in the stock market in the beginning of September soon after the Cabinet approved FDI in insurance, pension, aviation and retail, may prove to be of no use. Investors have already turned doubtful over the government’s resolve to carry forward the legislations and analysts believe any failure on the government’s part in the current session of Parliament, may cost a lot on investment front.
The government, which is somewhat short of a majority in the Lok Sabha, is in a minority in the Rajya Sabha. It needs support from parties to sail through the key test for its reforms credentials. For the expansion of India’s nascent insurance sector, the country needs an estimated $12 billion. However, if the bill is not passed this session, the capital constraints in the sector will remain.