Having got the unequivocal support of the corporate sector in the run-up to the general election, Prime Minister Narendra Modi is paying it back. Among the host of measures initiated by the Bharatiya Janata Party-led National Democratic Alliance government has been the rewriting of two key legislations – the Land Acquisition Act and the Companies Act.
The amendments come over a year after the saffron party had assisted the United Progressive Alliance government in the passage of the two legislation in Parliament. It had even suggested certain changes in the Land Bill, which were readily accepted by the Congress-led UPA government.
Of course, the BJP’s support for the UPA Bills was not without reason or plan. It could not reject legislation that favoured the farmer and the common man so close to an election. More importantly, the Bills further tarnished an already unpopular Congress. The previous regime was promptly dubbed “anti-industry” by the corporate sector, which was disillusioned by its inability to swiftly implement the second phase of economic reforms. In the process, the BJP succeeded in polarising the corporates in its favour. It also helped that the BJP had an “industry-friendly” face like Modi to helm the party.
Six months after coming to power, the BJP’s line has changed.
Showing great haste
Explaining the need for rushing ahead with the amendments, Finance Minister Arun Jaitley maintained that these were being incorporated to “ease the environment of doing business” as several provisions in the two Acts were impeding the growth of industry and holding up crucial infrastructure projects.
The Modi government was in such a hurry, in fact, that it went ahead with the promulgation of an ordinance to amend the Land Acquisition Act, even though the next Parliament session is to be held next February. Under pressure from industry, the ruling alliance started the process of amending the legislation soon after it formed the government last May.
Meanwhile, the amended Companies Bill was rushed through the Lok Sabha in the recently-concluded winter session of Parliament, with the government brushing aside the Opposition’s contention that the legislation be first scrutinised by a Parliamentary standing committee.
And yet both these legislation were firmed up by the previous Congress-led UPA government following extensive consultations with the BJP, which was in the opposition then.
Consent provision altered
The Land Bill was finalised after a consensus was evolved at an all-party meeting. At the same time, the then Corporate Affairs Minister Sachin Pilot and Rural Development Minister Jairam Ramesh made a special effort to reach out to BJP leaders Sushma Swaraj and Arun Jaitley for suggestions and cooperation in the passage of the two long-pending Bills.
To buy peace with the BJP, the UPA agreed to its suggestion that states be given the leasing option for all projects so that ownership of land could remain with the farmers, providing them regular income.
The BJP had also gone along with what was touted as the most important provision in the Bill, which required developers to get the consent of up to 80% of landowners whose land was to be acquired for private projects and 70% of affected families whose land was to be acquired for public-private projects.
It is this clause that has been amended by the Modi government following complaints from industry that the provision had made acquisition of land more time-consuming, holding up key infrastructure projects.
About a year ago, while Jaitley had privately praised Ramesh for how he had gone out of his way to accommodate the Opposition’s suggestions, Sushma Swaraj and BJP leader Chandan Mitra had appreciated the UPA minister’s efforts when the Bill was debated in Parliament.
Special courts' ambit reduced
The Companies Act, which has now been amended by the Modi government following representations from industry, had ironically been examined during the UPA regime by the parliamentary standing committee on finance headed by BJP leader and former Finance Minister Yashwant Sinha. It was hanging fire for nearly three years before it was finally passed after Pilot approached Jaitley for help. Several suggestions made by the standing committee were accepted by the UPA government.
But barely a year later, the BJP introduced 14 amendments to the legislation, stating that some of the provisions were so draconian that they had made it difficult to do business in the country.
It was pointed out, for instance, that the Companies Act provided for the constitution of special courts to try economic offences. Jaitley diluted this provision and now only severe cases will be handled by these courts. The finance minister also did away with the stringent bail provisions in the UPA Bill, stating that these were far too “oppressive” and made it impossible for an offending company official to get bail.
Putting down the UPA government for enacting this legislation, Jaitely told the Lok Sabha that while some provisions were left out because of oversight, others came in “ as part of this thinking that we must make doing business extremely difficult”. He, however, insisted that his government had no ulterior motive in amending the Act.
The amendments come over a year after the saffron party had assisted the United Progressive Alliance government in the passage of the two legislation in Parliament. It had even suggested certain changes in the Land Bill, which were readily accepted by the Congress-led UPA government.
Of course, the BJP’s support for the UPA Bills was not without reason or plan. It could not reject legislation that favoured the farmer and the common man so close to an election. More importantly, the Bills further tarnished an already unpopular Congress. The previous regime was promptly dubbed “anti-industry” by the corporate sector, which was disillusioned by its inability to swiftly implement the second phase of economic reforms. In the process, the BJP succeeded in polarising the corporates in its favour. It also helped that the BJP had an “industry-friendly” face like Modi to helm the party.
Six months after coming to power, the BJP’s line has changed.
Showing great haste
Explaining the need for rushing ahead with the amendments, Finance Minister Arun Jaitley maintained that these were being incorporated to “ease the environment of doing business” as several provisions in the two Acts were impeding the growth of industry and holding up crucial infrastructure projects.
The Modi government was in such a hurry, in fact, that it went ahead with the promulgation of an ordinance to amend the Land Acquisition Act, even though the next Parliament session is to be held next February. Under pressure from industry, the ruling alliance started the process of amending the legislation soon after it formed the government last May.
Meanwhile, the amended Companies Bill was rushed through the Lok Sabha in the recently-concluded winter session of Parliament, with the government brushing aside the Opposition’s contention that the legislation be first scrutinised by a Parliamentary standing committee.
And yet both these legislation were firmed up by the previous Congress-led UPA government following extensive consultations with the BJP, which was in the opposition then.
Consent provision altered
The Land Bill was finalised after a consensus was evolved at an all-party meeting. At the same time, the then Corporate Affairs Minister Sachin Pilot and Rural Development Minister Jairam Ramesh made a special effort to reach out to BJP leaders Sushma Swaraj and Arun Jaitley for suggestions and cooperation in the passage of the two long-pending Bills.
To buy peace with the BJP, the UPA agreed to its suggestion that states be given the leasing option for all projects so that ownership of land could remain with the farmers, providing them regular income.
The BJP had also gone along with what was touted as the most important provision in the Bill, which required developers to get the consent of up to 80% of landowners whose land was to be acquired for private projects and 70% of affected families whose land was to be acquired for public-private projects.
It is this clause that has been amended by the Modi government following complaints from industry that the provision had made acquisition of land more time-consuming, holding up key infrastructure projects.
About a year ago, while Jaitley had privately praised Ramesh for how he had gone out of his way to accommodate the Opposition’s suggestions, Sushma Swaraj and BJP leader Chandan Mitra had appreciated the UPA minister’s efforts when the Bill was debated in Parliament.
Special courts' ambit reduced
The Companies Act, which has now been amended by the Modi government following representations from industry, had ironically been examined during the UPA regime by the parliamentary standing committee on finance headed by BJP leader and former Finance Minister Yashwant Sinha. It was hanging fire for nearly three years before it was finally passed after Pilot approached Jaitley for help. Several suggestions made by the standing committee were accepted by the UPA government.
But barely a year later, the BJP introduced 14 amendments to the legislation, stating that some of the provisions were so draconian that they had made it difficult to do business in the country.
It was pointed out, for instance, that the Companies Act provided for the constitution of special courts to try economic offences. Jaitley diluted this provision and now only severe cases will be handled by these courts. The finance minister also did away with the stringent bail provisions in the UPA Bill, stating that these were far too “oppressive” and made it impossible for an offending company official to get bail.
Putting down the UPA government for enacting this legislation, Jaitely told the Lok Sabha that while some provisions were left out because of oversight, others came in “ as part of this thinking that we must make doing business extremely difficult”. He, however, insisted that his government had no ulterior motive in amending the Act.
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