Reforms in life after Left?
The Left support to the United Progressive Alliance (UPA) government has not come cheap in the past four years and nuclear deal is just one among the several policy initiatives that the Left kept vetoed. A new round of liberalisation — considered crucial for India to shift to a paradigm of double-digit growth — could now find a fresh chance, as the Left’s parting ways with the government is now only a matter of time.
Now, reformists in the Congress are hopeful while the Left leaders realise that their clout to dictate policies is no more. It’s a different matter how much will the Samajwadi Party — Congress’s new ally — will play along in pursuing these policies. The list of issues on which the Left has kept the government’s hands tightly tied is a long one.
The Banking Reforms Bill introduced in Parliament in 2005 is stalled because the Left opposes a clause providing voting rights to private investors in nationalised banks as per their share-holding. The Left wants to continue with the current arrangement of voting rights of the private shareholders to be capped at 10 per cent, irrespective of their actual holding. The government wanted to raise FDI cap in insurance from 26 per cent to 49 per cent. The Left vetoed. The Forward Contracts (Regulation) Amendments Bill and the Seeds Bill are on hold due to opposition from supporters.
Besides reforms in finance sector, Left has opposed reforms in education and labour.
These are two areas crucial for proper development and deployment of the country's human talent for its economic growth. While the stringent labour laws of the pre-reform era scare industries from being ambitious in hiring, the Left has stonewalled all efforts to liberalise them.
Left parties have stalled the Foreign Education Providers Regulation Bill. A Group of Ministers cleared the bill a year ago, but the HRD ministry has not been able to introduce the bill because of the Left's opposition to certain clauses on allowing foreign education providers in India.
The Left has also stalled the setting up of a Pension Fund Regulatory and Development Authority to reform pension fund management. The move was to allow pension funds to gain from capital markets, where the subscriber could have an individual pension account, portable across job changes and the flexibility to choose fund managers.
The Left trade unions CITU and AITUC opposed the provisions of the Unorganised Sector Social Security Bill (introduced in Parliament last year), which is intended to provide social security coverage to around 94 per cent of the workforce in the country. Left wanted two separate bills, one for the agriculture sector and other for the non-agriculture informal sector. They wanted administrative boards (in place of advisory bodies) with powers to implement the provisions of the bill apart from a dedicated national fund to cater to the needs of unorganised sector workers. The Ministry of Labour and Employment maintains that the Left's demands are impractical.
FDI in multi-brand retail is also on hold due to Left opposition and so are government's attempts to seek strategic partnership in profit-making public sector units.