NEW DELHI: Key second generation economic reform Bills expected of the Modi Government. The Labour Bill has been passed, but there are a slew of others that are precariously placed:
Modi has moved to amend archaic Labour Laws and reducing regulatory interference, while coaxing employees with more benefits. Both the Houses have already approved a Bill, to simplify the process of complying with 16 Labour Laws for small companies employing up to 40 workers, by placing the forms online.
The Treasury Benches badly need Parliamentary approval during the Winter Session ending on December 23, to allow overseas investors to hold a 49 per cent stake in insurance companies, up from the current 26 per cent cap. The industry hopes that the removal of the cap would result in $2 billion of inflows into insurance sector.
Finance Minister has declared a goal: The NDA Government wants to move a Constitutional amendment in the ongoing session, then win the consent of state Assemblies to implement India’s first nationwide service tax union by April 2016. If successful, economists say the measure could add two percentage to the GDP growth. However, the final draft of the Goods and Service Tax (GST) Bill is not yet ready or passed by the Union Cabinet.
Coal fields are due to be auctioned by February, followed by plans to allow commercial coal mining for the first time, and to invite in foreign miners. The government used an ordinance to bring about the changes. Now, it needs Parliamentary support, but its own workers union -- BMS -- is opposing the move, calling it “back-door privatisation” of coal mining.
The plan is to raise $9.5 billion by selling stakes in the state-run and private companies, including the big oil explorer, ONGC and monopolistic Coal India by March. Analysts doubt whether the target will be achieved. Market valuations are high and Modi seems determined to overcome labour union opposition to the Coal India sale. The sell-off has started late in the financial year. The govt has committed itself to lowering stake in public sector banks, while retaining a majority holding. It has not given a timeline. The government plans to further cut subsidies on fuel, fertiliser and food, estimated at over 21 per cent of total estimated revenue receipts in 2014-15.