Business Today

A 'Plan B' for crucial Bills in Parliament

Government must achieve with executive action what it isn't able to ratify through the Parliament.

twitter-logo Rajeev Dubey        Last Updated: January 23, 2017  | 14:32 IST

Rajeev Dubey, Managing Editor, Business Today
As the government readies to spar with the opposition yet again on the floor of the House in winter session of Parliament, it must realise that for the first time in Narendra Modi's tenure, it goes into this session with a trust deficit. Not with the opposition, but with the public in general and business in particular. Well, if that sounds too harsh, call it commitment deficit!

If the last few sessions have given Indians any idea about the way the government intends to go about its business in the Parliament as well as in its executive role, it isn't an encouraging sign. At the end of each session, the government has thrown up its hands, blaming the opposition for its inability to get key legislations ratified by the Parliament. But the fact is that the job has just got a lot tougher after the crushing defeat in Bihar polls. Opposition will come down harder and it's already sharpening the knives for the 'intolerance' debate.
Outside Parliament, patience is running thin. A lot needs to be achieved beyond the reassurances.

For, with a handsome majority in the Lok Sabha, the general public-and businesses--are unwilling to swallow the same "opposition is not letting us function" argument that the minority Congress-led Manmohan Singh government gave for 10 years. After all, it's not the opposition's job to run either the government or the legislature.

So what must the NDA government do?

It needs to have a Plan B for every legislation it intends to take through the Parliament. The Plan B must shortlist the top provisions of the intended Bill and prioritise those provisions that can be implemented through just the executive orders. And, the government must then act on implementing those provisions in case the Bill either encounters stiff opposition or is defeated in either houses of Parliament.

You would argue that this undermines the Parliament and the legislature. Not quite! Large scale changes in laws through Bills requires legislative approval, most executive orders don't. Ironically, a vast majority of what the government intends to do through Bills can be achieved through executive orders. That may not be an ideal solution but it may be essential to govern the nation under the circumstances. Most importantly, it sends a clear message to the opposition that not only does the government mean business, but that it won't get cowed down by stalling tactics.

Take, for instance, the GST legislation which the government so desperately wants approved by the Parliament. GST has a half-way solution too, in case the opposition to the government's GST bill stays. Its ultimate objective is to eradicate the confusion over multiple taxes and exemptions and to levy a single tax nationwide. So what should be the Plan B? For one, it's within the Centre's powers to request all 13 BJP-Allies run states/union territories to align with the Centre on a common tax. Taxes that have to be eliminated can be made 'zero' (since elimination of taxes requires ratification by the Parliament; reduction and increase in taxes is well within the powers of the executive). One of the taxes can be raised to whatever the GST Commission recommends as the national GST tax rate. And then play the waiting game until the Parliament approves the Bill.

Interestingly, knowingly or accidentally, the government's executive orders have eliminated the need for GST's twin tax Bill--the Direct Taxes Code (DTC). DTC aimed to moderate tax rates and do away with the exemptions to make tax compliances simpler and easier. But the Modi government's decision to eliminate corporate tax exemptions and reduce corporate tax rate from 30 pc to 25 pc was of the provisions of the DTC. Place of Effective Management (POEM), which is a test for tax residency of a company was another. The proposal on POEM was announced by the government this year. And, the Advance Pricing Agreement (APA) proposed under the DTC Bill has already been implemented through amendment of the IT Act.

The question is: if this could be done with the DTC code, why can't Plan B's be implemented as short-to-medium term alternatives to other contentious bills?

The only caveat is that the government needs to stay away from the kind of haughtiness it displayed in its failed attempt to legitimise a new land Act through successive re-promulgations of the Ordinance before backing out of it in the monsoon session of Parliament. It was foolhardy to expect the Congress-UPA would let it override its own Land Bill of 2013, especially with several pro-industry provisions that the NDA included in its own version. The opposition capitalized on the Bill as being anti-poor and that's when the fate of the Bill was sealed. It was nearly a year-long stand-off and there are many lessons to be learned from it. Hopefully, it won't repeat the mistakes.


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