Posts tagged ‘Lok Sabha’


India’s biggest tax reform GST looms, many companies unprepared | Reuters

Throughout years of political gridlock, the risk that India might pass its biggest tax reform since independence appeared reassuringly remote for many businesses.

Until now.Suddenly, the prospect that a new Goods and Services Tax (GST) could enter force next year has bosses panicking at the likely impact and seeking advice on how to cope.

The expected passage by parliament on Wednesday of a key constitutional amendment would resolve crucial issues needed to transform India’s $2 trillion economy and 1.3 billion consumers into a single market for the first time.

The amendment is likely to clear the Rajya Sabha after the opposition Congress party, which originally proposed the GST while in power, wrung concessions from Prime Minister Narendra Modi‘s government.

Yet the vote will only fire the starting gun in a legislative marathon in which the national parliament and India’s 29 federal states have to pass further laws determining the – still unknown – rate and scope of the tax.

At the same time, a huge IT system needs to be set up, tax collectors trained and companies brought up to speed on a levy that experts say will force them to overhaul business processes from front to back.

One boss who isn’t ready is G.R. Ralhan, head of Roamer Woollen Mills in the northern city of Ludhiana.

“Companies, particularly smaller ones, are apprehensive,” Ralhan told Reuters, calling for more time to adjust and saying a high rate of GST could put his firm out of business.

Countries that have introduced GST in the past have often faced a relative economic slowdown before the benefits of a unified tax regime feed through.

India is already the world’s fastest growing large economy, expanding by 7.9 percent year-on-year in the March quarter. Economists at HSBC forecast a boost of 0.8 percentage points from the GST within three to five years.

80-20 RULE

Tax experts say that only 20 percent of – mostly big – firms are getting ready for the GST. The rest are taking things as they come in a country where coping with a changing tax regime has been a way of life for decades.

Yet even those actively preparing must contend with a series of unknowns as the national and state parliaments tackle the task of transforming a “model” GST law into the real thing.

The first hurdle will be for a majority of state parliaments to pass the GST amendment, which would establish a GST Council to finalise key terms of the new tax.

That could take until November and mean that the legislation to put the GST into force would only come before the national parliament’s winter session.

Hitting the government’s target launch date of next April 1, the start of the fiscal year, looks ambitious. Slippage to July or October 2017 is increasingly likely, say experts.

Source: India’s biggest tax reform GST looms, many companies unprepared | Reuters


Modi to launch India’s biggest labour overhaul in decades | Reuters

Prime Minister Narendra Modi is preparing to launch India’s biggest overhaul of labour laws since independence in a bid to create millions of manufacturing jobs, at the risk of stirring up a political backlash that could block other critical reforms.

Prime Minister Narendra Modi waves towards his supporters during a rally in Mathura, May 25, 2015.  REUTERS/Adnan Abidi

Three officials at the central labour ministry told Reuters that the ministry was drafting a bill for the upcoming parliamentary session that proposes to loosen strict hire-and-fire rules and make it tougher for workers to form unions.

The changes, if approved by parliament, will be the biggest economic reform since India opened its economy in 1991, but it is likely to meet stiff opposition in parliament and from labour activists.

The prime minister enjoys a majority in the Lok Sabha, but not the Rajya Sabha, hobbling his ability to pass politically contentious measures.

That handicap has stymied his efforts to make it easier for businesses to buy farmland and convert Asia’s third-largest economy into a common market.

Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight, said Modi had little option but to push ahead with the measures.

“Without these reforms, the economy would stagnate, and frustrated investors would look elsewhere,” he said.

“You cannot make political opposition an excuse for not taking tough decisions.”

Since taking office in May last year, Modi has taken a series of incremental steps to make labour laws less onerous for businesses, but fear of a union-led political backlash made him leave the responsibility for unshackling the labour market with Indian states.

He let his party’s governments in Rajasthan and Madhya Pradesh take the lead in this area.

Encouraged by a successful and peaceful implementation of the measures in those states, the federal labour ministry now intends to replicate them at the national level, one of the ministry officials said.

Manish Sabharwal, one of the brains behind Rajasthan’s labour reforms and co-founder of recruitment firm Teamlease, said the federal administration would have been better off without attempting these changes.

“Let states carry out these changes and save your political energy for other policy reforms,” he said.

via Modi to launch India’s biggest labour overhaul in decades | Reuters.


India’s Parliament Just Had the Most Productive Session in Years – Here’s How It Did It – India Real Time – WSJ

India’s Parliament is not known for its productivity. Disruptions, adjournments and delays to proceedings are often a feature of parliamentary business in the world’s largest democracy.

But the recently-concluded budget session was the most productive in recent years, according to PRS Legislative Research, an organization that tracks the affairs of the Indian Parliament.

During the four-month-long sitting, productivity in India’s lower house –the number of actual working hours as a percentage of the total scheduled hours for parliamentary business – was 123%.

That’s the most productive the lower house, known as the Lok Sabha, has been in 15 years. In fact, the lower house decided to extend the session by three days.

The upper house was slightly behind, with a productivity measurement of 101%.

“A lot of financial business got done, a lot of legislative business got done and a lot of issues of national importance were discussed,” said Chakshu Roy, head of outreach at PRS Legislative Research.

“Both the houses met for a longer period of time and that’s the reason the productivity of the Parliament has gone up,” he said.

Such prolonged discourse eventually results in robust policies and laws, which ultimately helps in better governance, said Mr. Roy. ”If you debate something extensively, then the different nuances of the subject come out,” he said.

via India’s Parliament Just Had the Most Productive Session in Years – Here’s How It Did It – India Real Time – WSJ.


Delayed reforms, market woes tarnish end to Modi’s first year | Reuters

A surprise delay to India’s new goods and services tax (GST) marks one of the most painful setbacks suffered by Prime Minister Narendra Modi‘s government as it nears the end of a first year in power, with markets falling and farmers braced for a poor monsoon.

Prime Minister Narendra Modi attends an event in New Delhi February 17, 2015. REUTERS/Stringer/Files

Investors had hoped that the ruling Bharatiya Janata Party‘s majority in the Lok Sabha, the lower house of parliament, would ensure Modi could push through reforms far more smoothly, but that assumption has taken a battering.

Late on Tuesday, the government submitted to strong opposition in the Rajya Sabha, the upper house, by agreeing to delay the landmark tax legislation until at least July.

The introduction of the GST would constitute India’s biggest tax reform since independence.

The delay to the bill is a blow to a government that is already dealing with rural discontent over proposed land reforms, which have also still to be sent to the upper house for approval.

The GST would replace a patchwork of levies by the central and state governments, reducing corruption, attracting investment and — according to the finance minister — add 2 percentage points to India’s growth.

Senior officials said on Wednesday they feared the delay could become yet another “sell” signal for foreign funds, already angered by the government seeking to tax them for several years of previously untaxed gains.

“A delay in parliament approval of the GST bill will send a wrong signal to investors, who are already grappling with tax notices,” said one senior government official dealing with economic policy decisions.

India was Asia’s second best performing market last year and the government has scored some successes. It has, for example, improved its finances, held successful telecoms and coal block auctions, and allowed more foreign investment into the insurance and defence sectors.

But the shine has worn off. Foreign investors sold nearly $2.2 billion in shares during the last 16 trading sessions.

via Delayed reforms, market woes tarnish end to Modi’s first year | Reuters.


Rahul Gandhi’s Speech: The Indian Media’s Surprise Verdict – India Real Time – WSJ

India’s punditocracy in recent weeks has loved to hate Rahul Gandhi.

Mr. Gandhi, the vice president of India’s opposition Congress party, was derided by some opinion-makers for taking a break from frontline politics in mid-February–and not returning until mid-April. But on Monday, in a speech before Parliament, Mr. Gandhi surprised many pundits.

Not by what he said — he attacked, as expected, the government’s proposed changes to India’s laws on purchasing land — but by the fact that he spoke at all.


Mr. Gandhi, who is a member of Parliament, rarely speaks in India’s lower chamber, the Lok Sabha. In fact, this was only his first address since Congress lost badly in national elections almost a year ago.

Congress’s loss provoked deep soul-searching within the party about its future. Mr. Gandhi was Congress’s prime ministerial hopeful in that drubbing.

On Monday, Mr. Gandhi blasted India’s prime minister, Narendra Modi, and his Bharatiya Janata Party, for proposed changes to the Land Acquisition Act that, among other things would make it easier for businesses and the government to buy land for defense, industrial corridors, affordable housing and infrastructure projects by removing a requirement to obtain the consent of more than two-thirds of landowners.

Mr. Gandhi’s Congress party argues these changes are bad for India’s huge population of farmers, who he described in Parliament as the country’s backbone. “Everything has been built on a foundation that has been provided to us by the farmer,” Mr. Gandhi told lawmakers.

Pictures of Mr. Gandhi, dressed in a close-fitting white kurta and flanked by some of the party’s youngest members of Parliament, filled television screens and set his name trending on Twitter on Monday evening.

It also put the ruling BJP on the defensive after months of relatively limited challenges from the Congress party.  A piece in the Indian Express newspaper said the government was pushed into “damage control after Rahul Gandhi’s attack over the agrarian situation.”

Sanjay Singh, who writes about politics for Firstpost, wrote that Mr. Gandhi’s “rather aggressive pitching in Parliament has surely charged up Congress’ ranks.”

Another piece, posted on the IBNLive website of the Indian news channel CNN-IBN, said Mr. Gandhi had shown “he is back and he means business.”

“Maybe it is the low expectations,” the IBNLive piece said, “but Rahul Gandhi was definitely on fire.” The article was published with no byline.

via Rahul Gandhi’s Speech: The Indian Media’s Surprise Verdict – India Real Time – WSJ.


Kashmir fight adds to hurdles for Modi’s reform push | Reuters

A ruckus over the release from prison of Masarat Alam Bhat, the man who led the most serious revolt in decades against the Indian military in Kashmir, is adding to mounting problems for Prime Minister Narendra Modi as he tries to push economic reform through parliament.

Masarat Alam Bhat (2nd R), a Kashmiri separatist leader, speaks on his mobile phone at his residence in Srinagar March 9, 2015. REUTERS-Danish Ismail

The Lok Sabha was temporarily adjourned on Monday after opposition parties demanded to know why the separatist leader was released at the weekend by Kashmir’s state government, which Modi’s nationalist party supports.

“I am angered and condemn the release, just like other lawmakers,” Modi said in parliament. “I can assure you that my government was not informed about the decision by the state government and neither were we consulted.”

Modi swept to office ten months ago promising rapid economic transformation but disparate opposition parties have united to block his agenda, forcing the government to rely on executive orders called ordinances to pass unpopular policies.

With two weeks remaining of the current session of parliament before a recess, the government needs to win support for ordinances, including those raising the foreign direct investment limit in the insurance sector, or they will expire.

via Kashmir fight adds to hurdles for Modi’s reform push | Reuters.


A New Look for Indian Railways – India Real Time – WSJ

Indian Railways is trying to get a makeover.

“We want to improve passenger amenities,” said Suresh Prabhu, India’s new minister for railways, via a video conference at an event organized by the Asia Society in Mumbai Wednesday.

India’s nationalized rail network carries around 30 million passengers a day and has a budget for 2014/15 of 654 billion rupees ($10 billion.)

So what will the new railways look like? Mr. Prabhu gave some clues Wednesday.

Better food: Train travelers have long grumbled about the quality of food served on Indian trains including watery dal (lentil soup) and thick rotis (Indian bread.)

Mr. Prabhu said he’s considering a plan to set up base kitchens that will make good quality food to supply trains.

He’s also exploring an option to tie up with restaurants along train routes, so that commuters can order food from those restaurants, and the food would be delivered onto the train by Railway staff.

Some private websites have lately started  offering this facility on their own, such as, and

Mobile ticket booking: The Indian Railways’ website, which allows travelers to book tickets online, is one of the most-frequently visited websites in India.

Now, Indian Railways wants to introduce an option for travelers to be able to book train tickets on their cellphones. Mr. Prabhu didn’t clarify if he was referring to a new app for this booking.

He said Wednesday that a technical glitch has delayed the launch, but passengers can expect it soon.

Cleanliness: The Railways are looking to improve the quality of toilets and waiting spaces at train stations, said Mr. Prabhu. “We also want to improve the coaches,” he said. The plan is to retrofit existing train coaches and set up a factory for making new coaches, he added.

“In the next few months we should be able to put in place a complete blueprint” to achieve these goals without denting the rail finances, said Mr. Prabhu.

via A New Look for Indian Railways – India Real Time – WSJ.


BJP Fares Poorly in By-Elections in India’s Most-Populous State – India Real Time – WSJ

The Bharatiya Janata Party’s landslide victory in national elections a few months ago spawned predictions of an unstoppable political juggernaut. But results of by-elections show cracks in the BJP’s dominance.

India’s governing party held onto only three of 11 seats that went to the polls for the legislative assembly of Uttar Pradesh, the country’s most-populous state. The BJP had won all these seats in the last state elections in 2012.

The regional Samajwadi Party, which governs the state but suffered a big blow in national elections, won the remaining eight seats, according to India’s Election Commission.

Just four months ago, the BJP won a historic 72 of 80 seats for the national Parliament from Uttar Pradesh on the back of a wave of support for Prime Minister Narendra Modi. This result helped propel the party to a majority in the lower house of Parliament, with 282 of 543 seats.

The magnitude of the win raised expectations that the BJP would come out on top in the by-polls, which are mid-term elections held for those seats that have fallen vacant since the previous election.

The results showed that while Mr. Modi had swung the national election by making it a presidential-style vote for or against his leadership, his charisma might not be enough to carry his party to power in state elections, where local issues and caste equations dominate the vote. It also raised questions about the BJP’s prospects in crucial upcoming state elections in Maharashtra and Haryana.

Some also saw the outcome as fallout from a polarizing BJP campaign that critics say sought to consolidate Hindu votes in Uttar Pradesh by spreading animosity against Muslims – and marked a return by the party, which has roots in India’s Hindu nationalist movement, to the religious agenda that defined its strategy a decade ago.

via BJP Fares Poorly in By-Elections in India’s Most-Populous State – India Real Time – WSJ.


Jaitley’s biggest tasks lie ahead: big-bang reforms and restructuring the Finance Ministry

The finance minister has had to tackle inflation, India’s stance in the WTO and easing regulatory hurdles. That was the easy part.

Even before the general election ended in May, it was clear that if the Narendra Modi-led Bharatiya Janata Party formed the government, Arun Jaitley would head one of the important ministries on Raisina Hill, the area of Lutyen’s Delhi that houses some of the most important government buildings.

But Jaitley’s move to North Block, the part of the Hill housing the finance ministry, was not easy. Contesting his first Lok Sabha election, he lost the race in Amritsar to the Congress candidate by nearly one lakh votes, raising questions within the party about his eligibility to be granted a key ministry. Jaitley, who has also been given charge of the defence ministry, is a man with as many detractors as admirers in New Delhi and within his own party.

Often teased in Delhi circles as the only Congresswala in the BJP, Jaitley was seen by many as an obvious choice for the crucial portfolio of finance. He got the job because he has a shrewd strategic mind and knows how to work Delhi. In addition, the BJP needed someone who had the nerves to handle a ministry that was practically in the ICU despite valiant, though sometimes questionable, efforts by his predecessor and friend, the Congress’s P Chidambaram.

Both Prime Minister Narendra Modi and Jaitley had only a few days to present their first budget to a Parliament and nation that had been promised big-bang economic reforms. As Jaitley presented the Modi government’s first budget on July 12, many who had expected major reforms were left disappointed even though some praised it for pointing in the right direction.

As a member of the Federation of Indian Chambers of Commerce and Industry said, this was a “benefit of the doubt” budget because of the short period in which Jaitley and his team had to think things over. The real test will come in 2015.

Huge challenges

A change in government is not the only factor that drives ministerial reform. The bureaucracy also needs to endorse the new policies. In getting the bureaucracy on board, Jaitley’s team in North Block has faced plenty of challenges, such as the minister’s inability to address the thorny issue of retrospective taxation.

Other things that kept Jaitley busy as soon as he took over were controlling inflation, India’s stance on subsidies at the WTO and making it easier to do business by removing regulatory hurdles. But the enormity of reforms needed to transform the Indian economy and pushing its growth rate to more than 6% require willpower and the stomach to take politically unpopular measures, especially in sectors such as power.

“There are three or four sectors where we just cannot continue doing business as usual,” said Pratap Bhanu Mehta, president of the New Delhi-based Centre for Policy Research. “In areas such as energy we are too dependent on imports and on carbon-intensive energy sources. If we are not on an alternative energy path soon, which means low carbon and technologically efficient [forms], we could be out of the development game in 15 to 20 years.”

It is the support system for business that requires key changes. Foreign industry remains bullish on India but has made its displeasure known over the slow progress on issues such as foreign direct investment, land acquisition and retrospective taxation.

On the domestic front, many industrialists have asked for a revitalised subsidy regime, one in which the government gives subsidies wherever required instead of using them as a populist measure to get votes. At the same time, as a vital component of the global economy, India could find it increasingly difficult to persist with its subsidy regime even if it makes sense on the domestic front.

Back to the drawing board

Globalisation and climate change will become central to India’s economic story. The Asian Developmental Bank concluded in a recent report that South Asian economies such as India could lose 1.8% of their GDP by 2050 and 8.8% of their GDP by the end of the century to climate change.

via – News. Politics. Culture..


Rahul Gandhi Wakes Up to New Role as Rebel Leader – India Real Time – WSJ

There’s nothing particularly newsworthy about boisterous Indian lawmakers blocking debate on the floor of Parliament when they don’t get their way, unless one of the lawmakers is the usually-reticent Rahul Gandhi.

The typically uninvolved Parliamentary back-bencher and Congress party vice president made the front pages of Indian newspapers Thursday after he and others mobbed the desk of the lower house of Parliament’s speaker, demanding to be heard.

“Rip Van Winkle Rahul Finally Rises Out of Slumber,” read an Economic Times headline paired with a recent photograph of Mr. Gandhi nodding off during a parliamentary session.

Mr. Gandhi, who is part of a diminished Congress camp of 44 representatives in the 545-member Lok Sabha, also made a rare statement to reporters outside Parliament complaining that opposition parties were not being allowed to speak. He accused speaker Sumitra Mahajan of bias after she shot down a proposal to discuss recent communal violence.

“There is a mood in Parliament that only one man’s voice counts,” Mr. Gandhi said in an apparent reference to Prime Minister Narendra Modi.

On the campaign trail a few months ago, Mr. Gandhi had said a Modi-led government would polarize Indians and trigger religious unrest.

Mr. Gandhi’s outburst was described as “surprisingly belligerent” in the Times of India that also carried a front-page story about what they called his “new-found combativeness.”

The fourth-generation scion’s occasional public outbursts are closely covered by the national media. In October when he called an executive order by his own party’s government “complete nonsense,” his tantrum was reported, discussed and debated for days.

On Wednesday, television news channels questioned what may have prompted a reaction from a leader who in his decade-long career in Parliament has rarely engaged in debate or taken the lead on policy issues.

The governing Bharatiya Janata Party offered one theory.

Finance Minister Arun Jaitley said Mr. Gandhi’s show of aggression was a result of internal rumblings – a “palace coup” – in the beleaguered Congress that is struggling to bounce back after its worst ever electoral defeat in national elections.

The party’s dynastic leadership by president Sonia Gandhi and her son, Rahul, must be struggling and Mr. Gandhi’s actions Wednesday were an attempt “to show they are also capable of aggression,” Mr. Jaitley said.

Congress spokesman Randeep Singh Surjewala said there “wasn’t an iota of doubt or question” within his party on the Gandhis’ leadership. Some “disgruntled elements hankering for immediate power” had abandoned the Congress after the electoral defeat, Mr. Surjewala said, but added that his party had weathered numerous challenges in the past and, like before, would emerge stronger.

He said the Modi-led government couldn’t run away from a discussion on religious violence by making personal attacks against Congress or its leaders.

via Rahul Gandhi Wakes Up to New Role as Rebel Leader – India Real Time – WSJ.

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