Thanks to recurrent disruptions in Parliament, coupled with the coming assembly elections in five states, including Uttar Pradesh, three key financial sector Bills, which were meant for introduction in the Winter Session, are unlikely to be tabled before the session comes to end next week. The session may now end ahead of the schedule either on Monday or Tuesday, rather than Thursday, as planned originally. These Bills are the one to “prohibit all private cryptocurrencies”, another to amend banking laws to facilitate privatisation of public sector banks and a third one to modify the pension laws to give more flexibility to the regulator concerned on how to invest post-retirement corpus.
Ahead of the Winter Session, the government had listed 26 new Bills, including the above three Bills. However, all the three Bills as well as the one on reforms in power distribution business seem to have been taken off the table. There
is only a “remote possibility” of introduction of these Bills in the current session, sources aware of the matter told FE. Due to the ruckus by the Opposition in Parliament, the approval for supplementary demand for grants for gross additional spending of `3.74 lakh crore has been held up and it is likely to be taken up on Monday or Tuesday.
“Friday was sort of last day for introduction of Bills,” an official said. On Friday, three other Bills were introduced in the Lok Sabha, including the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021, aimed at reforming and speeding up the disciplinary mechanism for professionals in these fields.
On the first day of the session on November 29, the government introduced and passed a Bill to withdraw the three laws governing agriculture marketing, in the face of determined and prolonged protests by large sections of farmers.
The government seems to buy more time on the Bill to ban private cryptocurrencies, which remain unregulated in India. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, is aimed at a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India. The Bill also allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses in the private sector. The government is also reportedly planning to amend the income tax laws to bring cryptocurrencies under the tax net, with some changes expected in the next Budget. Stock and commodity markets watchdog Sebi might oversee cryptocurrencies and regulate the affairs of exchanges dealing with them, as the government is considering classifying cryptos as financial assets, according to industry sources.
With bank employees unions observing two-day strikes on December 16-17 and more such protests planned ahead of upcoming assembly polls, the government seems to have dropped the plan to introduce a Bill to amend the Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980 and incidental amendments to Banking Regulation Act, 1949, to enable privatisation of two public sector banks. According to sources, NITI Aayog has already recommended the sell-off of Indian Overseas Bank and Central Bank of India to the core group of secretaries on disinvestment, headed by the Cabinet secretary.
The Pension Fund Regulatory and Development Authority (Amendment) Bill seeks to make PFRDA the regulator of superannuation funds managed by corporate houses for their employees to bridge the regulatory gap. The Bill also proposes to relax rules to allow more products other than annuity products for the mandatory investment of 40% of the corpus of a subscriber at the time of exit from the national pension system (NPS). With returns from annuity on the decline (now around 5%/annum), the proposed change would allow investment of the 40% corpus (after 60% is given lump sum at the of exit) in other products such as systematic withdrawal plans in NPS or inflation-indexed annuity products.
The government intended to introduce the direct benefit transfer (DBT) mechanism through amendments to the Electricity Act to restrict power distribution companies (discoms) from making arbitrary subsidy claims to recover the amount from their respective state governments. The Union power ministry has dropped the plan to disburse electricity subsidies to eligible consumers like farmers and households through the DBT system fearing backlash, sources said. The Bill could be taken up next year.