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Reforms to face winter session test

Thursday, 22 November 2012 - 7:07am IST | Place: Mumbai | Agency: DNA
Analysts are, however, sceptical whether the government would be able to push through the reforms given the spectre of prolonged disruptions leaving little business to be conducted.

The winter session of Parliament, which kicks off today, is set to be a stormy one.
The government has lined up several important Bills including allowing FDI in insurance and pension sectors and is likely to table progress reports on several ongoing reform programmes.

Analysts are, however, sceptical whether the government would be able to push through the reforms given the spectre of prolonged disruptions leaving little business to be conducted.

“As the UPA government is currently in a ‘minority’, there is a possibility that reviewing of key reform Bills would not be an efficient process,” said economist Rohini Malkani at Citi.

The government needs to get the fiscal deficit under control by increasing tax revenue through the goods and services tax, boost investment in infrastructure and power through a clearer land acquisition process and improve the subsidy system through the Public Procurement Bill.

Among other key legislations to be tabled include the land acquisition and public procurement Bills.

“It is going to be a mixed bag. I think Bills like the Companies Bill, the Competition Bill and the Forward Contract Regulation Act Bill, which are also important in the reforms process, will get passed,” said Abheek Barua, chief economist at HDFC Bank. “But high-profile Bills like the Land Acquisition Bill won’t see the light of day.”

“Given the current political uncertainty, it will be difficult to push the controversial Bills like foreign direct investment (FDI) in insurance and pension through, unless some kind of understanding is been reached with the opposition parties,” said Sujan Hajra, chief economist at Anand Rathi Securities.

Opposition parties, on the other hand, have been demanding a debate on raising FDI in multi-brand retail even though the decision does not require legislative consensus.
Also, a former UPA ally Trinamool Congress wants to bring in a no-confidence motion.

“Our worry is that even a discussion on FDI in multi-brand retail will lead to heated debates and could lead to disruption in parliamentary proceedings,” said Nomura economists Sonal Varma and Aman Mohunta in a report.

They said that if the no-confidence motion is accepted and passed, the future of the ruling government will be at stake, but if the motion is rejected it would fortify the ruling government and embolden its resolve to carry on the reform process.




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