The road ahead: Govt raring to push economic reforms

ON REFORM PATH: Finance Minister P Chidambaram says it's important to find ways by which pending bills can be taken forward.

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Keywords: Pension Fund Regulatory And Development Authority Bill, SBI (Amendment) Bill

New Delhi: After the crucial Vote of Confidence win, the UPA Government is all charged up about its reform agenda, and there is a fair amount of unfinished business left too.

There are about eight major economic bills awaiting parliamentary approval:

Banking

In the banking space, there are two pending reform bills. The first is the Banking Regulation (Amendment) Bill, 2005, which seeks to remove the 10 per cent voting cap for shareholders. Then is the SBI (Amendment) Bill, 2006, which is also stuck because the Left would not agree to reduce the Government's shareholding in SBI.

Insurance

Another bill that has raised Left’s eyebrows in the past is the insurance bill, which currently lies with a Group of Ministers. The Left consistently opposed raising the FDI cap in the sector from the present 26 per cent to 49 per cent.

Pension

The Pension Fund Regulatory and Development Authority Bill, 2005 is also in limbo. The bill seeks to usher in a new pension system of defined contribution, something that the Left did not approve of.

“Yes, we will try to take the reform process forward. There are many bills that are pending in Parliament. It's important to find ways by which these bills can be taken forward,” Finance Minister P Chidambaram said.

Apart from that, the forthcoming monsoon session may also see amendment to the SEZ Act if the GOM agrees to a proposal by the Finance Ministry to levy MAT on units in SEZ. The Mines Ministry is also expected to move amendments to the Mines and Minerals Development Act, which would operationalise the new minerals, already approved by the Cabinet.

But a bill, which may not see the light of day soon is the amendment to the Direct Tax Bill. The code is yet to be finalised and the Law Ministry is yet to vet the same.

But moving through with these bills may not exactly be a cakewalk. The Government will need to take its new allies along as it fast tracks the pending reform measures.

“We'll have to now take stock of the situation and reach out to parties which may have voted against us on July 22 on the nuclear agreement but may be willing to support us on economic reforms,” Chidambaram said.

Deputy Chairman, Planning Commission, Montek Singh Ahluwalia, too, sounds optimistic. He says, “I think some of these bills are not inherently controversial with the new allies that the Government has found.”

But the other problem for the UPA is the short legislative window available to it. The Monsoon session is expected to be a short one and the winter session even shorter. With elections likely in March or April, it will be a herculean effort to go through with some of its key reforms.