Column: Parliaments poorest performance

Updated: Feb 10 2014, 08:20am hrs
The first few days of this last session of the 15th Lok

Sabha has mirrored its performance over the last five years. This Lok Sabha has the dubious distinction of seeing the highest percentage of time lost to disruptions (over a third of the scheduled time) leading to a decline in work done. This has resulted in the lowest number of bills passed by a full-term parliament (165 till now, compared to 297 and 248 in the previous two). Over a third of these have been passed without much deliberation on the floor of the House. The cost of parliaments inability to perform effectively can be seen in it working below par on three of its key roles: making laws, holding the government to account for its actions, and allocating financial resources of the central government through the budgetary process.

Making laws

A few bills with significant impact have been passed, early in the term of this parliament, and in the last one year. In 2009 and 2010, parliament enacted the Right to Education Act, established the Green Tribunal, and passed the Civil Nuclear Liability Act. After a long lull through 2011 and 2012, there was a prioritisation of some bills in 2013. Though just 15 bills (other than appropriation bills and the finance bill) were passed last year, these included the following: a new companies law, amendments to criminal law regarding safety of women, protection for women against sexual harassment at workplaces, land acquisition, food security, the Pension Bill and the Lokpal Bill.

That said, many important bills initiated by the two UPA governments have not been passed. These bills have implications across many sectors. These include bills that aim to restructure the regulatory architecture for higher education, a different one for medical education and the medical professions, a set of anti-corruption and service delivery bills, regulatory changes to ensure quality of seeds and pesticides for farmers, and a set of bills related to the economy and financial markets.

The list of bills related to the economy illustrates the failure to meet the ambitious targets. The Direct Taxes Code Bill was initiated in 2008 (as a draft) with the aim to simplify the tax system. It aimed at removing most exemptions and deductions (as these distort economic decision-making) which would provide the space to reduce the tax rate while remaining revenue neutral. By the time the bill was introduced, several provisions related to withdrawal of exemptions were removed but the bill is yet to be debated. The discussion on the Goods and Services Tax has been going on for years. A bill to amend the Constitution to enable this tax was introduced but the government has not been able to forge a consensus across states and across political parties.

The amendment to the forward contracts regulation act were initiated in 2006, but have not been passed yet. The proposals include making the regulator (FMC) an independent and statutory regulator, and demutualisation and corporatisation of commodity exchanges (and also permitting options and other derivatives), the importance of which is evident after the recent issues in that market. The micro-finance sector is still waiting for clear regulations and the bill is pending since May 2012. The government has issued and re-issued an ordinance to amend the Sebi Act related to consent orders and search/seizure but has been unable to take this up in parliament.

Higher education and knowledge creation would be important factors in the growth of the Indian economy. Following two high-level committees, a bill was introduced that reforms the sector by removing silos across subject areas, and replacing various education regulators such as the UGC, the AICTE and the bar council with a unified regulator. Other bills provide for dematerialised certificates (to improve authentication), permit foreign universities to operate in India, prohibit capitation fees, set up bodies that would give quality ratings, and have specialised tribunals. All these bills are still awaiting parliamentary approval.

Holding the govt to account

A second important role of the legislature is to ensure the accountability of the government for its policies and actions. The case of the 2G spectrum allocations illustrates how parliament has not been able to fulfil this role effectively. In 2005 (two years before the allocations), the parliamentary standing committee on information technology had examined the issue of spectrum management. However, it did not give clear recommendations on the methods for allocation. That was a missed opportunity. Then, following the report by the CAG, the matter was taken up by the public accounts committee. That committee was unable to finalise a report. In parallel, after parliament was stalled for a full session, a JPC was formed to examine the issue. The report was adopted by the 30-member committee by a 16-11 vote (3 members were absent). In sum, parliament failed to fulfil its role as a policy oversight body at an early stage and as a fact-finding body at the later stage.

The power of the purse

Any government spending requires pre-approval by the legislature. This is done through the budget process via the demands for grants by each ministry and department. Parliament is expected to examine the various demands, and given overall funding constraints, debate the best possible resource allocation. However, in recent years, parliament has often not discussed the demands in detail. For example, in 2013, all the demands for grants were passed without any discussion. There have rarely been years in which the demands of more than 5 ministries were discussed or when over 15% of the demands were discussed before approval. (It must be noted that there is a basic flaw in the process. Money bills are conventionally seen as equivalent to a no-confidence motion. If the governments budgetary demands are not approved, it is expected to resign. The high stakes mean that there is limited flexibility for parliament to make changes.)

Parliament is designed to discuss and deliberate issues so that a compromise across conflicting interests can be found. This Parliament has been largely ineffective in doing so. The task before the MPs in the next parliament is to rise above partisan considerations and act with statesmanship to find widely acceptable resolutions to difficult issues.

MR Madhavan

The author is the president and co-founder of PRS Legislative Research