Congress signals support for three key reform legislation

Business Standard, November 03, 2014

Opposition party unlikely to block Bills for GST, insurance and e-auction of coal mines.

The Congress has decided to back three crucial economic reform legislation that the National Democratic Alliance (NDA) will bring in the winter session of Parliament beginning November 24. These are the constitution amendment Bill for implementing the Goods & Services Tax (GST), the insurance laws (amendment) Bill and the coal ordinance.

NDA needs the support of the Opposition party to pass important legislation, as it does not have a majority in the Rajya Sabha.

Despite the earlier ambivalence of Congress-ruled states on GST, the party would not block the constitution amendment Bill for the new indirect tax regime, top party sources said. “Anxieties about how the states will be compensated – because many feel they will lose out if GST is introduced – remain. But this was a Congress initiative and we will not block it. We will, however, insist that the fine print is what we want it to be,” said a minister in the previous government and an advisor on parliamentary affairs.

The party will also support the insurance laws (amendment) Bill, which stipulates that shareholding of foreign investors (including foreign institutional investors) in an Indian insurance company – owned and controlled by Indians – should not exceed 49 per cent of paid-up capital.

After the Bill was referred to a select committee in the previous Parliament session, the 15-member panel is considering it at present. The select committee’s deliberations will reflect the stance of various political parties on the issue. The Anna Dravida Munnetra Kazhagam’s (AIADMK’s) position is not known, but given the current configuration of the select committee, the Bill will pass muster only if the Congress decides to back it.

The Congress says the insurance Bill is a move by its government, so it will be churlish to block it.

Similar is the case with the coal ordinance. Given that the ordinance has been occasioned by a Supreme Court order terming the coal block allocations during the Congress government’s regime illegal, it is unlikely that the party will oppose it. The Congress, though, would like the discussion steered away from the issue of illegality and to focus more on the way the coal mining sector can be restructured. Also, the party will not vote against Bills related to consolidation of banks, should those come up in Parliament.

However, the biggest Opposition party has made it clear that it will not countenance any changes in the land acquisition Act, especially the clause pertaining to retrospective compensation.

The retrospective clause in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, returns the land to the original owners where the acquisition has been pending for a period greater than five years prior to the start of 2014. The qualifying criteria that must be satisfied are that compensation (for the land) should not have been paid to the land owners or physical possession of the land should not have been parted with (even if the authorities have altered the title in the revenue records).

Kamal Nath, the Congress member of Parliament from Chhindwara, said the Madhya Pradesh government, for instance, acquired land for dams and irrigation projects in the past, rendering a staggering number of families destitute. Later, the state either did not move or moved tardily in creating assets for public purposes; it diverted land for other purposes like commercial ventures, Nath said. According to him, retrospective compensation in the new land acquisition Act attempts to make amends for the wrongs done by its predecessor – the land acquisition Act, 1894 – across the country. Changes in this would be resisted by the Congress. Amending the land acquisition Act so that it makes it easier for industry to acquire land, on the other hand, is a promise that the Bharatiya Janata Party (BJP) had made in its election manifesto.

Any change in the land acquisition Act will need endorsement in the Rajya Sabha, where BJP has only 43 members in the 250-member House. Along with its current NDA allies, the number increases to around 100, which is substantially short of a simple majority. By comparison, the Congress has 68 members. The stand of either the Nationalist Congress Party (six members), which recently decided to give unconditional support to BJP in Maharashtra, or the Shiv Sena (three), which snapped its alliance with BJP, is not known. Also, there is no clarity on the AIADMK’s position, for it is only nominally a supporter of the government.

BJP has in the past said that not having a majority in the Upper House is not a problem and that it can get legislation passed by recommending that a session of the Lok Sabha and Rajya Sabha be held together. The party has more than simple majority in the Lower House, enough to offset the shortage of seats in the Rajya Sabha. However, this is easier said than done. To call a joint session, a House needs to have passed a Bill that falls in the other House. To resolve the logjam, the President of India has to be petitioned to call a joint session, which has a combined strength of 795 members of Parliament – 545 from the Lok Sabha (543 elected, two appointed) and a maximum of 250 from the Rajya Sabha. If the land acquisition Bill has to be amended to remove the retrospective clause, a joint session will be required to pass it before 2016. By that year, the complexion of the Rajya Sabha is likely to have changed in favour of the ruling alliance.


There are 67 Bills pending in the two Houses of Parliament. Some that could come up for discussions during the winter session:

  • Land acquisition (amendment) Bill, 2014
  • Small factories (regulation of employment and condition of services) Bill, 2014
  • The apprentices (amendment) Bill, 2014
  • The juvenile justice (care and protection) Bill, 2014
  • The prevention of corruption (amendment) Bill, 2013
  • The Telecom Regulatory Authority of India (amendment) Bill, 2008
  • The Delhi High Court (amendment) Bill, 2014
  • The Food Safety and standards (Amendment) Bill, 2014
  • The securities laws (amendment) Bill, 2014
  • The coal regulatory authority Bill, 2013
  • The real estate (regulation and development) Bill, 2013
  • The Indian Medical Council (amendment) Bill, 2013
  • The factories (amendment) Bill, 2014

The Constitution (scheduled castes) orders (amendment) Bill, 2014

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