Modi government moves to ease business rules, weed out archaic laws

[Double Edge]

Like i think you're cherry picking. Are statues & compensation to women the defining aspects of this budget ?

The first two years have damage control to deal with. They could have been more bold but they chose not to.

This is not going to be a replica of congress. There is meme coined by Sanjaya Baru, a beginning of the 2nd republic to use a French metaphor. Modi wants to be the next Nehru in terms of being as consequential a leader. The old BJP guard is expected to retire and as retired people do, go for long walks. Their ideas are about to expire.

Another commentator using the same metaphor.

[Oracle]

Like i think you're cherry picking. Are statues & compensation to women the defining aspects of this budget ?

The first two years have damage control to deal with. They could have been more bold but they chose not to.

This is not going to be a replica of congress. There is meme coined by Sanjaya Baru, a beginning of the 2nd republic to use a French metaphor. Modi wants to be the next Nehru in terms of being as consequential a leader. The old BJP guard is expected to retire and as retired people do, go for long walks. Their ideas are about to expire.

Another commentator using the same metaphor.

Nope, I don't think I'm cherry picking. Where is GST? Where is DTC? Labor reforms? 49% FDI in Insurance and Defence? Multi brand retail being shot down.

You say the first 2 years is for damage control. What damage control? BJP won a majority for heaven's sake. Why would Lockheed-Martin or Boeing give out full TOT or even invest in a climate controlled by Indian management? You live in Bangalore as I do, and you know as I do how inefficient Indian managements are, yet you comment on me cherry picking?

My point about 200 crores being spent on Sardar Patel's statue is more than cherry picking. There are parts of India that cries and begs for food (the part I belong to), that money could have been used for modern technological agricultural methods, where those poor folks who do jhum cultivation every year, get almost nothing in return and thereby destroy the soil conditions and the environment.

We don't need statues. We need food. We need to spend every money we have on research and development and helping the poor.

1/3rd of world’s extreme poor in India; highest under-5 deaths

[Double Edge]

Nope, I don't think I'm cherry picking. Where is GST? Where is DTC? Labor reforms? 49% FDI in Insurance and Defence? Multi brand retail being shot down.

ok, so there are some more now to chew over. GST requires constitutional amendment, not enough support yet in the upper house.

Labour reforms is something they are testing the waters with. See how Rajasthan goes. Otherwise the states complain about lack of federalism and being dictated to by the centre.

Insurance & defence already got 49% FDI. Not enough to entice companies to come over and do tech transfer, they'd want a controlling stake. But it's a start

multi-brand retail is a cryptic one. Saw a op-ed that said it is being slowly allowed through the back door. Ambigious status with loop holes. Govt says they are against it but things can be done.

You say the first 2 years is for damage control. What damage control? BJP won a majority for heaven's sake.

By damage control i mean tightening belts. It's not as positive as people would like.

Could they have been bolder given the support they currently have, sure. A bit too cautious. I can't say why this or that was not done other than to think they are balancing what they can handle now and take things as they come. Still early days. Doing reforms means treading on turfs of others that have got their cake and like it that way. What is the path of least resistance at any given point in time. Just how much of a shit storm are they going to have to put with with in the next few months.

Why would Lockheed-Martin or Boeing give out full TOT or even invest in a climate controlled by Indian management? You live in Bangalore as I do, and you know as I do how inefficient Indian managements are, yet you comment on me cherry picking?

Comment was about statues & women, without mentioning anything else and then saying its like congress.

My point about 200 crores being spent on Sardar Patel's statue is more than cherry picking. There are parts of India that cries and begs for food (the part I belong to), that money could have been used for modern technological agricultural methods, where those poor folks who do jhum cultivation every year, get almost nothing in return and thereby destroy the soil conditions and the environment.

ok so this is what you would have preferred instead of statues. So many things to do, only so much space in one budget. For now i will give them the benefit of the doubt.

We don't need statues. We need food. We need to spend every money we have on research and development and helping the poor.

1/3rd of world’s extreme poor in India; highest under-5 deaths

yes, they should not have done it but i guess we have to put up with these sorts of quirks with any govt.

Food is a dicey topic right now given the inflation which is mostly supply side constraints and lack of efficient transport. Take the APMC's. Those govt regulated market places. I recall reading a suggestion that farmers should be allowed to sell to any one they want instead of being regulated to sell only in an APMC. This means dismantling APMC's, less wastage and more efficient market.

the builders are celebrating, infrastructure got a boost. This means credit is coming, more jobs in that sector and a more positive environment.

The sound of an economy that is working is jack hammers, dump trucks, concrete trucks and materials being unloaded :)

[ajhax]

GST requires constitutional amendment, not enough support yet in the upper house.

The tricky part is to convince states on two issues -
i) Inclusion of petroleum and alcohol into GST. They constitute big proportion of state revenue so no state wants to loose control over it.
ii) Inclusion of entry tax.

We may end up with some compromise solution over these two issues. Once that is done, GST shouldn't take time.

[ajhax]

My point about 200 crores being spent on Sardar Patel's statue is more than cherry picking.

200 crore is peanuts when compared to the whole budget. I would worry more about what they are going to do about subsidies. Food subsidies would itself be around 1.2 lakh crores.
Though I am not a fan of wasting even a single paisa on damned statues.

[ajhax]

Labour reforms is something they are testing the waters with. See how Rajasthan goes. Otherwise the states complain about lack of federalism and being dictated to by the centre.

Labour reform is touchy issue. Very difficult to perform with all those unions and politicians against it. Especially for central government. So it is nice that they are pushing state governments to reform it from their side. If successful, it would create competition among states to loosen their labour laws. Rajasthan has started it. Let's hope it works.

[Double Edge]

Big challenge: Can Modi govt push through labour reforms? | Jul 19 2014 | DH

Big challenge: Can Modi govt push through labour reforms?
Ajith Athrady, New Delhi, July 18, 2014, DHNS:

The Narendra Modi led government at the Centre recently hinted at its plans to bring reforms in labour laws as a first step towards its initiative to fulfill the BJP's 2014 poll promises that it will accord high priority to job creation and opportunities for entrepreneurship.

The Union ministry of labour proposing to make changes in four major national enactments -- the Factories Act, the Minimum Wages Act, the Industrial Disputes Act, and the Contract Labour Act -- which are identified as ‘hurdles’ to expansion of investments in manufacturing sector in the country.

In a recent meeting with state labour ministers as well as labour union leaders, Union labour minister Narendra Singh Tomar spelt out the Centre’s intention to make industry friendly laws and sought their co-operation. To begin with its exercise, the labour ministry has sought the suggestions from all stakeholders, including industries, trade unions and experts, on its proposal to amend the 66- year-old Factories Act.

Among the proposed amendments to the Factories Act, which has been pending for a long time, are improved safety of workers, increasing the penalty for violation of the Act, doubling the provision of overtime from 50 hours a quarter to 100 hours in some cases and from 75 hours to 125 hours in others involving work of public interest, relaxing the norms of female participation in certain industry segments, and reducing to 90 from 240 the number of days that an employee needs to work before becoming eligible for benefits like leave with pay.

Though companies are elated with the Centre’s move to bring reform in the laws, trade unions including RSS backed Bhartiya Majdoor Sangh have cautioned the government against taking any unilateral decision on the vexed issues. Knowing fully well that any changes in labour laws will be met with resistances from strong labour lobby, Tomar also assured that the Centre will strike a balance between business and labour communities and protect the interest of all sections.

Nevertheless several states have shown their inclination to bring changes in the age old labour laws. The Vasundhara Raje government in Rajasthan has already gone ahead with taking a decision in a recent cabinet meeting to amend these Central laws and sought the Centre’s help on the issue. As the labour laws are in the concurrent list and it needs amendments at both central and state government levels to execute the changes.

The corporate houses have always argued that industry friendly labour laws will not only make India an attractive investment destination but also spur growth in domestic manufacturing sector. Investors dubbed archaic labour laws as a key hurdle for doing business in the country.

Industries body like the FICCI demands that the government to bring reform of the labour laws to boost manufacturing industry particularly textile and clothing industry and raise India’s share in world exports.

Officials in the department of industrial policy and promotion (DIPP) says that the archaic laws are the major reason why 84 per cent of manufacturing companies in the country have opted to remain small, by employing fewer than 50 workers.

Newer reforms

Even the Economic Survey for the 2013-14 clearly stated that India needs to unleash second generation labour reforms and capitalise on demographic advantage for creating new firms and jobs.

The survey suggestion assumes significance as the employment growth during 2004-05 to 2011-12 was only 0.5 per cent compared to 2.8 per cent during 1999-2000 to 2004-05 in the country.

Indeed India with a large and young population has a great advantage. The average age of the 125 billion strong country's population will be 29 years in 2020, even younger than the 37 years of China and the US.

Besides, the proportion of working-age population in India is likely to increase from 58 per cent in 2001 to more than 64 per cent by 2021, adding about 63.5 million new entrants between 2011 and 2016 with a large number of young persons in the 20-35 years age group.

Taking advantage of such an opportunity, the ultimate goal of the economic policy is to create a sustained renaissance of high growth in which hundreds of millions of good quality jobs are created, survey argued.

Trade unions are worried that the government may try to impose ‘hire and fire’ policy in the name of reforms. BMS general secretary Brajesh Upadhyay demanded the Centre hold discussions with the trade unions before making any changes in laws.

Apprehending that the government wanted to allow the industry to have a hire and fire policy, he said “How can it be permitted? It is misleading to hold labourers responsible for slowing economic growth”.

With India Having 47 Central laws and over a 100 state laws that regulate the relationship between employers and workers, yet the link between these laws and declining industrial productivity is still a debatable issue. While industrial houses call for sweeping changes in laws and scrapping of inspector raj system, trade unions say most of these laws remain on papers and not being implemented properly.

Interestingly, this is not the first attempt by the government to bring reforms in labour laws to fit the prevailing investment environments. earlier attempts made by previous governments at the Centre have have failed due to strong resistance from labour unions.

It seems the Modi government is moving quickly on the issue as the labour ministry is preparing the ground for holding another round of talks with labour unions soon.

However one has to wait and watch the developments as several RSS backed organisations including the BMS have slammed the NDA government move on the issue.

Labour reform is touchy issue. Very difficult to perform with all those unions and politicians against it. Especially for central government. So it is nice that they are pushing state governments to reform it from their side. If successful, it would create competition among states to loosen their labour laws. Rajasthan has started it. Let's hope it works.

competition to attract investment amongst states, yeah sounds like a good strategy.

[Double Edge]

Another minefield (land acquisition reform) to clear for the Impossible Missions Team

States seek easier land sales in reform challenge for Modi | Reuters | Jul 16 2014

Wed, Jul 16 2014
By Sanjeev Miglani

NEW DELHI (Reuters) - States eager to kick-start major infrastructure projects have proposed radical changes to land acquisition laws that are blamed for stalling billions of dollars' worth of roads, railways, ports and power installations.

According to a confidential government paper seen by Reuters, several states want to do away with obtaining landowners' consent altogether in some cases and to cut through red tape which they say holds up development. Restrictions to buying land, strengthened under the last Congress government, are among the biggest barriers to projects that include a proposed high-speed rail network championed by incoming Prime Minister Narendra Modi. The reformist 63-year-old leader won India's strongest mandate in 30 years in a general election in May, but lacks a majority in the upper house of parliament that represents India's 29 states.

That will force him to strike a bargain to implement his ambitious economic growth agenda. "We have to find an equilibrium, we have discussed the land acquisition law with the states and I have taken the suggestions to the prime minister," Road Transport and Highways Minister Nitin Gadkari told an industry conference on Tuesday.

Demand for land in densely-populated India has led to increasing tension between investment needed to create jobs for the one million people who enter the workforce each month and the interests of farmers and tribal communities. The land purchase law enacted by the last government sets compensation to landholders at four times the market price and requires the approval of 80 percent of landowners for any deal. It also requires a social impact study involving public hearings - procedures that industry executives say can drag out the acquisition process for years.


LAND SALES HAVE STALLED

At a meeting with the federal government late last month, the states proposed an overhaul of the land acquisition law. Since the changes came into force in January, there has been no major sale of land. In the government paper, the states proposed removing a requirement to get landholders' consent in the case of public-private partnership projects, or at least bring the threshold down to 50 percent of affected landowners. They have also asked that the social impact study be either dropped altogether or confined to projects where large tracts of land are being acquired, the document said. Gadkari was last month put in charge of the rural development ministry which framed the land ownership law, giving him powers to push through change.

Relaxing land acquisition laws alone may not be enough to fill an infrastructure shortfall estimated to cut annual gross domestic product in Asia's third-largest economy by two percent. Private companies have long struggled to get environmental and forest clearances for new projects and other government approvals, stalling construction of roads, power plants and port facilities. Capital-constrained banks are also lending much less money to the infrastructure sector than they did before the economy slowed, curbing funding for new and existing schemes. A total of 189 projects, including $10 billion in highways, are stalled because of difficulties with land acquisition, environment clearances and red tape, Gadkari's ministry says.

LAWS TIGHTENED TO PROTECT FARMERS

Modi himself enjoys a reputation as a builder, removing political and regulatory hurdles in his home state of Gujarat, when he was chief minister, that have stalled infrastructure and factory projects in other parts of India. In 2008 he sent a text message to invite Ratan Tata, former head of Tata conglomerate, to build a factory to produce the world's cheapest car in Gujarat after protests over land acquisition stalled the project in West Bengal.

The land in Gujarat was transferred to Tata within days. Industry leaders say the biggest challenge they face is getting landowners' agreement to sell, and that it would be better if the government intervened. "If you are a family of four people, would all of you agree on everything? Land acquisition should ideally be done by the government and handed over to industry," said V.R. Sharma, a former deputy managing director at Jindal Steel and Power.

The states have also urged the government to review the definition of people affected by a land acquisition, saying it was too broad and costly. At the moment compensation must be paid not only to residents, but also farm labourers, tenants, sharecroppers and workers in the area three years prior to acquisition."The definition of 'affected family' is too large and it will create immense problems in land acquisition," the government of Uttar Pradesh, India's most populous state, was quoted as saying in the position paper.The laws were tightened last year to prevent the government taking land from farmers, tribes and small communities, which proponents of the changes said violated their rights and dated back to the colonial era.

($1 = 60.1400 Indian Rupees)

(Additional reporting by Krishna N. Das and Tommy Wilkes; Editing by Mike Collett-White)

[Double Edge]

if we're gonna attract investment we have to empower people to actually invest in larger amounts.

Removing Delays | DH | Sept 16 2014

Removing delays

Sep 16, 2014, DHNS

The decision to empower Central ministries and departments to clear investment proposals costing up to Rs 1,000 crore (under $170 million) without they going through the cabinet route for approval, is a step in the right direction. This has been done by amending the Transaction of Business Rules for the Cabinet Committee on Economic Affairs (CCEA). This change goes a long way in cutting the bottlenecks that dog the clearance of most projects leading to unending delays. Hitherto, the ministries could clear projects worth up to Rs 300 crore ($50 million) , beyond which they had to be approved by the CCEA. The move will be obviously welcomed by the industry as it has the aim of ensuring speedier clearance of projects. Importantly, it will help do away with centralisation of powers within the government. The NDA government’s decision comes shortly after another move to decentralise clearances of environment projects by allowing the regional empowered committees in different parts of the country competent to grant approvals for projects requiring up to 40 acres of forest land.

The fast track project clearance is expected to help infrastructure ministries, especially the road transport and highways ministry and those implementing social sector schemes. The road transport ministry - which has been blamed for tardy construction of national highways - had recently complained of delays because of multitude of required clearances. With this move, the ministry may look to award contracts for 8,500 km of roads this fiscal itself besides completing construction of 6,300 km.

While the last week’s cabinet decision is a welcome one, this does not mean that all hurdles towards clearing a project, even if it is within Rs 1000 crore size, are done away with. While a project gets cleared from that ministry, it has to obtain clearances from other ministries as well. This is where delays can still happen, especially in cases such as land acquisition for infrastructure, mining or other projects. As a next step, the Narendra Modi government would do well to look into this aspect also. Approvals should mean clearance from all agencies - public and private - and not just from the nodal ministry. Along with this, greater transparency is needed which would go a long way in helping make the project a clean one devoid of all blemishes such as corrupt deals. As for large projects involving the states and having inter-ministerial issues, they have to be still referred to and approved by the CCEA or the cabinet.

[Gun Grape]

Wow, How do you get anything done?????

[Oracle]

Wow, How do you get anything done?????

You know how much the Government pays me to do this work. My sister-in-law is getting married, and my wife wants to gift a gold chain to her. So, Sir, help me help you.

*********CORRUPTION****************

[Firestorm]

Wow, How do you get anything done?????

We don't. If we were getting things done, we wouldn't be in this situation.

[Double Edge]

Commander's post goes here

Another good move by the government. If they are able to even remove half of it then it is definitely for the good,



Source

Govt to seek repeal of over 1,000 obsolete laws in winter session

The government is planning to introduce a fresh Bill in the winter session of Parliament to repeal over a 1,000 archaic laws in the financial, social, land and infrastructure sectors.

Union law minister Ravi Shankar Prasad told reporters at an informal meet that there was a need to ensure that redundant laws like Bengal District Act, which dates back to 1836, Bengal Bonded Warehouse Association Act (1838), Sheriffs' Fees Act (1852), Dramatic Performances Act (1876), etc, are repealed to be in consonant with modern times.

In the next session of Parliament, 287 obsolete laws and amending Acts will be proposed to be repealed. Out of 72 obsolete statutes recommended by the Law Commission for repeal, 35 are the Central Acts and 22 are State Acts.

According to the law minister, nearly 700 Appropriation Acts are pending for the past several years where no follow-up action has been taken. While in England, such Acts remain in force only for 3-4 years, in India, any legislation passed by Parliament remains valid unless repealed, he told reporters.

The NDA government had already introduced a Bill in the Lok Sabha during the Budget Session for repealing 32 Acts. The Repealing and Amending Bill, 2014, seeks to remove certain Amendment Acts and Principal Acts from the statute books as they have outlived their utility.
Prasad has also written to chief justices of all high courts to monitor cases relating to sitting MPs and MLAs against whom charges have been framed for the offences specified under Section 8 of the Representation of People Act, 1951.

Pointing to the recent direction of the Supreme Court that trials in respect of Mps/MLAs, women, elderly persons, children and disabled should be decided speedily, Prasad has urged HC chief justices to evolve a suitable mechanism to monitor such cases so that the directions of the apex court are complied with by the trial courts in letter and spirit.

Meanwhile, sources in the law ministry said West Bengal chief minister Mamata Banerjee has, in a letter to the law minister, said the Centre should clearly mention in National Judicial Appointments Bill that the governor will have to follow the advice of the state government in the appointment of high court judges.

Banerjee's communication has come in response to a letter written by Prasad to all chief ministers requesting them to ratify a constitutional amendment Bill to make way for the proposed commission for appointment of judges to the higher judiciary. Once the commission is put in place, it will scrap the present collegium system.

The Bill makes it clear that the views of the chief minister will be sought in writing and “the role of the governor has to be seen in the constitutional sense. The law minister had clarified on the issue while replying to the debate on the Bill in Parliament,” a senior law official said.
In August, Parliament had passed a Constitution amendment Bill that will facilitate setting up of a commission for appointment of judges, replacing the 20-year-old collegium system which has been under severe criticism.

The Bill will make way for the setting up of the National Judicial Appointments Commission (NJAC), which will appoint and transfer judges to the Supreme Courts and the 24 High Courts. While the Rajasthan Assembly has already ratified the Bill, other states are likely to take up the exercise in October and November when their assembly sessions commence.

[Double Edge]

S&P upgrades outlook for India rating to "stable" from "negative" | Reuters | Sept 26 2014

REUTERS - Standard and Poor's raised the outlook for India's "BBB-minus" rating to "stable" from "negative," saying the country's government mandate and improved political setting offered a conducive environment for reforms.

S&P had cut India's outlook to "negative" in April 2012. India is now rated at the lowest investment grade with a "stable" outlook by all three major global credit agencies.

Still BBB- though.

Lots of ebullient yap in the article but its a small positive step. An actual ratings change isn't expected before 2016.

[ambidex]

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Some good points made by Swami.