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Reforms set to get a quiet burial

Aditi Phadnis & P Vaidyanathan Iyer

If you thought the pace of reforms was slow, think again - and even more slowly, this time. The era of governing India by political consensus is officially over. From now on, the NDA government will have to fight every inch of the way in implementing its agenda, a job made doubly difficult without the willing cooperation of the sulking Telugu Desam Party.

The ugly anger of the protagonists of Indian politics was evident on the first day of Parliament where, because of happenings in Gujarat, neither House was allowed to function.

On Sunday, a BJP minister in the NDA government refused to share the dais with a Congress chief minister because of Sonia Gandhi's reported remark that the prime minister "had lost his mental balance."

The tone of political discourse is adversarial and confrontationist - and the reforms announced by Finance Minister Yashwant Sinha in his Budget are going to take the first hit.

Any forward movement in the banking and financial sector, agriculture, and cooperatives requires Parliament to pass an enabling legislation. The possibility of any meaningful debate on the Electricity Bill and the Fiscal Responsibility and Budget Management Bill seems remote.

While the select committee is yet to finalise its recommendations on the Electricity Bill, the final form of the FRBM Bill is ready for debate in Parliament.

The comprehensive bill on banking sector reforms is also at the mercy of the House. The bill, on which the banking division in the finance ministry is at present working, aims to strengthen creditor rights through foreclosure and enforcement of securities by banks and financial institutions.

There is no word on the Congress's stand on this bill and the government thought the door to negotiation was open. No longer.

The bill to reduce the cap on government holding in PSU banks to 33 per cent has been pending before a Standing Committee for over a year. This measure, crucial in taking banking sector reforms forward, is unlikely to come in this session, or indeed even in the next.

Amendment to the Sebi Act was also promised in the budget session. With differences between the finance ministry and the department of company affairs having been sorted out in the last few days, the details of the amendments are being fine-tuned. The question is whether Parliament will see it through.

As reforms is still going through the phase of legislative sanction, its pace is scripted on the floor of the two Houses.

Earlier, the Congress was willing to concede that bad politics - ie, BJP politics - could be kept separate from good economics and had spelt out the bottomline on the extent to which it would support the government's economic reforms programme.

This involved agreeing to refer amendments in legislation to Standing Committees of Parliament where a consensus could emerge on contentious issues.

This is not likely to happen any more.

The hardening of political positions is such that the Congress now believes it is the government's responsibility to get the legislation passed or face the music.

Even relatively small issues - like the controversy over amending textbooks or rewriting history - will now take on huge proportions and render the political atmosphere rancid.

In the Rajya Sabha, the government, already in a minority, will have to cope with an even more intractable opposition. Forget crucial labour law amendment, for instance - the TDP will now not vote with the government, using abstention as a way to show its distancing from the BJP-NDA government.

Much more rigorous floor management in the Lok Sabha will have to be ensured by party managers to prevent the possibility of unpleasant legislative accidents.

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