Government proposes a slew of legislations in the budget session of Parliament
With the budget session of Parliament having already commenced on March 12, the Government has drawn up plans to introduce a number of far reaching legislations including the Debt Management Office Bill, a Bill to regulate the realty sector in the country and the Mines and Minerals (Development and Regulation) Bill.
The Debt Management Office is proposed to be set up through legislation in the Finance Ministry for better management of public debt. The government has proposed to set up an independent DMO, aimed at separating the RBI’s roles as the decider of interest rate in the market and being the banker to the government. At present, both the government’s debt and fresh borrowings are managed by the central bank. In his 2011-12 Budget speech, Finance Minister Pranab Mukherjee had mooted the proposal to introduce the Public Debt Management Agency of India Bill. The Reserve Bank of India has opined against setting up a separate entity, DMO, to manage the sovereign debt of the government, saying only the central bank has the requisite expertise to manage market volatility. RBI had further said that in order to achieve monetary and financial stability, separation of debt management from central bank seems to be a “sub-optimal choice”.
On the other hand, the government is going ahead with its move to introduce legislation in Parliament during the budget session to regulate the real estate industry. The Bill would protect the interest of consumers without hurting the growth of the realty sector. Real estate developers led by CREDAI and NAREDCO have opposed the legislation in its present form and have claimed that it would become a breeding ground for corruption when implemented. The effort of the government is to enforce disclosure, fair practice and accountability in real estate sector and to check fly-by-night operators. India is currently faced with a shortage of 26 million of houses.
Similarly, the new Mines and Minerals (Development and Regulation) Bill is also likely to be placed in Parliament to replace the existing Mines and Minerals (Development and Regulation) Act, 1957. The Bill seeks a complete and holistic reform in the mining sector with provisions to address issues relating to sustainable mining and local area development, especially families impacted by mining operations. It calls for sharing of 26 per cent profit by mining companies for the development of the tribal areas and their rehabilitation due to displacement of mining activity.
The Bill aims to ensure transparency, equity, elimination of discretions, effective redressal and regulatory mechanisms along with incentives encouraging good mining practices, which will also lead to technology absorption and exploitation of deep seated minerals. The Bill has been already cleared by the Group of Ministers headed by the Finance Minister and by the Union Cabinet. Industrial lobbies have already swung into action to oppose the implementation of the Bill.