Ab ki baar Ordinance ki Sarkar

1.      Ordinance is “un-constitutional”.

 – Rajnath Singh, BJP President on UPA-2 government’s move to bring anti-graft ordinance

2.      When bill is pending before the standing committee of the Rajya Sabha, how can the government bring an ordinance?

-          Arun Jaitley, Leader of Opposition in Rajya Sabha speaking on anti-graft ordinance

3.      BJP is opposed to this ordinance as it is unconstitutional, illegal and immoral.

-          LK Advani, BJP Patriach

Yet in stark contrast and amidst the sign of desperation and avoiding confronting the opposition in Rajya Sabha (the government still doesn’t have enough numbers to push through), the Modi sarkar has passed another critical law through an “ORDINANCE” route. If the current trend continues, this government will have a distinction in using the ordinance route for enacting major laws in the country.

What is an Ordinance?

Article 123 of the Indian Constitution empowers the President of India to promulgate ordinances during the recess of the Parliament. The ordinances are temporary laws having the effect of an act. Further, there are many other requirements which needs to be adhered to for the ordinance to remain functional and converted into a full fledge act. Failure to do so, the ordinance will lapse and the temporary act becomes null and void.

Telecom Regulatory Authority of India (TRAI) Act, 1997

NDA government’s ordinance route started with the clearance of appointment of Nripendra Misra (former chairman of TRAI) as Principal Secretary to PM Modi and this came within 48 hours of government assuming office on 26^th May, 2014. The government had to use ordinance route as Section 5(h) of the TRAI act bars its former chief from assuming any responsibility in either central or state government. Known to have high integrity and leadership skills, Misra was the obvious choice for Modi as per his propaganda of “Minimum Government, Maximum Governance”. The move caught many unawares, but was well appreciated and showed the governments intent – “It means business”. Awaiting the amendment of TRAI Act would be a long drawn procedure and government wants to get in the groove right from the word go.

Insurance, Coal Bills bypass the Logjam in Parliament via Ordinance route

After a spate of Hindu centric statements including “Ghar-Wapsi” (of citizens belonging to minority communities of this country to the Hindu fold) by the elected representatives of parliament (Sadhvi Niranjan Jyoti, Sakshi Maharaj and Yogi Adityanath) and members of Vishwa Hindu Parishad, Bajrang Dal and Rashtriya Swayamsevak Sangh (parent bodies of BJP), the opposition cornered Modi and his sarkar in the winter session of parliament. They gave them a dose of their own medicine (remember the post 2G and Coalgate deadlock in the parliament). The opposition remained stead fast on its demand of the PM’s opinion on the matter and sought an apology from the members. Opposition parties used the opportunity to stall the functioning of parliament and ultimately the delay in the passage of Insurance Bill (increasing FDI limit to 49 per cent from the existing 26 per cent) and Coal Bill (reallocation of coal reserves after Supreme Court cancelled licenses of 204 mines) in the key winter session (the next will directly be the budget session of the parliament in February 2015). The government’s lack of number in the Upper House of parliament was an armoury with the opposition and they used it to the hilt. As a result of the oppositions move, the government couldn’t get the bills passed.

The urgency in ordinance for the coal allocation is justified as post cancellation of coal blocks, there is a looming threat of coal shortage which will lead to electricity deficiency. The imports will have to increase substantially to meet the energy demand and this shall put further strain on the government finances. But it is important to note that there is a significant shift in coal policy. For the first time, the companies, both Indian and foreign will be allowed to mine the coal commercially. Till date it was only for captive use. Companies like Rio Tinto, BHP Billiton, among others will reap the benefit of the policy shift. The urgency on Insurance bill to raise the FDI limit to 49 per cent is not justifiable and certainly debatable.

Medical Devices: Make in India

Along with the ordinance on Insurance and Coal, the government also took the ordinance route to bypass parliament for allowing 100 per cent FDI in brownfield projects of medical device manufacturers in the country, through the automatic route. The move is aimed at encouraging manufacturing in India and shall also help reign in the prices of key medical devices like stents and pacemakers.

Land Acquisition or Land Grabbing Bill

The Land Acquisition Act enacted by the previous regime, sought to give considerable power to the people who own the land in the form of higher compensation, minimum consent of 80 per cent of the populace, among others. The act also laid emphasis on analyzing the social and environment impact assessment coupled with food security. Since its enactment in 2013, the act was opposed by business houses as the one to be against them or is making it difficult to do business. The pressure tactics and off course the financial muscles have been strong enough to mend the governments back on retracting on some of the key elements of the act. And the “business friendly” government did bow down to its “financial masters” and diluted the key components like doing away with environment impact assessment (how can we forget what happened in Uttarakhand due to rampant uncontrolled development), also clearing the way for acquisition of multi-grain land. Remember India has one-third of world’s poor, which makes it close to 400 million and food security is of utmost importance for the nation. The ordinance also does away with mandatory 80 per cent consent clause. Even the real estate redevelopment projects in Mumbai need consent of more than 70 per cent of the occupants and it’s still financially viable to do business. Most importantly, the people for whom all this is being done are also not happy because an ordinance lacks power and can be revoked.

Why the Tearing Hurry?

The governments tearing hurry to enact laws through ordinance route originates from both its political and country’s economic needs.

Saffron is the colour of the season

On the political front, the honeymoon period of the government is drawing to an end. Notwithstanding the gains reaped in states like Maharashtra, Haryana, Jharkhand and Jammu & Kashmir. A closer look at the polling numbers in Jharkhand reveals that the tribal pockets have deserted BJP which voted for it in Lok Sabha elections. Also, a clear rejection of BJP in Kashmir Valley (party lost its deposit in 33 of the 34 seats it contested) has started to weigh. The vote share was not very encouraging in Maharashtra either. A lot of credit for this goes to its band of MPs who wish to paint the country in saffron hues. Today, the vote is no more for Modi, it’s for BJP and without fail its non-secular credentials come to the fore. The upcoming elections in Delhi, will be the litmus test of the governments actual performance (ghar-wapsi and polarization will be major issues in this election along with the economic agenda). The failure of the government on the black money front (a major poll promise) will also dent its fortunes and AAP will make sure it exploits this to the fullest for its own revival.

Not so Rosy Numbers

On the economic front, Modi’s ascension to the top was inversely proportional to falling international crude oil prices. But it’s not going to be a lasting phenomenon and the trend will reverse very soon, for both Modi and oil prices. Though in spite of oil prices plummeting more than 40 per cent, the financial position of the country is grim and the government is resorting to budget cuts, albeit on critical aspects like agriculture subsidy, NREGA and healthcare to maintain fiscal prudence. The tax collections are much less as compared to the estimates. The Captains call from the Red Fort to clean India, build more toilets and Make in India haven’t been able to go beyond the usual strutting of ear drums and off course the photo-op (broom has become the new prop). The government is yet to finalise the policy and allocate capital for clean India and toilets. Make in India is also still on paper and the policy on 100 smart cities haven’t moved beyond the reams of Urban Planning department (realizing its failure in coming up with a draft proposal, the department has now shifted the onus on states to identify the cities).

The hype and hoopla globally around Modi the magician is also on the wane. The midyear budget was also met with a lukewarm response and the industry awaits the upcoming budget (the first full budget) with baited breath. The government will also have to resolve the GST deadlock (it was BJP ruled states which were blocking the implementation during UPA governments tenure. Will be interesting to note their moves) and ensure its implementation by April 2016 for streamlining the tax web in the country.

Country needs a new FM?

May be its also time Modi rethinks of his choice of finance minister (FM). Arun Jaitley, the eminent Supreme Court lawyer and called master strategist by his peers, has been one of the most hapless FM the country has ever seen. His volte-face on critical issues like black money (where he said was unaware of tax treaties), squarely putting the blame on RBI governor (when he should be thanking him) for almost everything from poor IIP numbers to sagging economy to others is not in the best interest of the country. In my opinion he is becoming the male version of Bengal CM Mamata Banarjee…a cry baby for everything.

India Shining – Will history repeat itself?

In order to send right signals (how you define right signals is very subjective) to the global community and to continue to maintain its political capital (to undo the damage done by the loose cannons and shift the focus back on economics), the government is showing urgency in getting through the reforms. But does bypassing the fundamental postulates of democracy is the right way of doing so? You need to answer that. But before that, will have to raise the right set questions? And your questions will decide, whether the likes of Rajnath Singh, Arun Jaitley and LK Advani (he is anyway become insignificant) eat the humble pie (for their above statements) or do they get away with murdering the democracy.