New Delhi, March 19: The worst fears of investors across the country, and the globe, appear to have been confirmed by today's dismal start to the Atal Bihari Vajpayee government. If, investors argue, the Prime Minister of the country is held ransom by midnight intrigues and is forced to withdraw his candidate for the job of the Finance Minister, then how can he be expected to take any tough decision on sensitive/contentious issues. Jaswant Singh, apparently, was the only minister that Vajpayee was pressing for in the entire team.Investors, for example, have been quite worried about statements from BJP allies such as George Fernandes on throwing certain multinationals and on ambiguous statements such as not wanting MNCs in certain industries. It was, however argued by BJP supporters, that a genuine moderate like Vajpayee would prevail and not allow the swadeshi rhetoric to get out of hand. Last night's drama, however, puts a big question mark over Vajpayee's control over his party colleagues.
Sharpdivisions are certain to crop up within the BJP coalitions on other vital economic issues such as closing down, or divesting government equity in sick public sector units and in reducing the country's vast subsidy network. If the BJP, for example, hopes to achieve any success in the agriculture sector, it will have to make sharp surgical strokes to cut the vast subsidy empire which has almost haemorrhaged the sector. This is bound to raise the hackles of, for example, the Akalis who have done their utmost to raise subsidies to farmers.
And even if we assume that the BJP will manage to get over these troubles, there is no wishing away the fact that the party is virtually paralysed when it comes to getting legislation passed through the Rajya Sabha, where it is in a hopeless minority. It has just 45 members (plus 14 of the AIADMK, and 4 of the Shiv Sena), against 88 of the Congress and 53 of the United Front. Chandrababu Naidu's TDP has another 8, but even if it does go along with the BJP eventually, thatstill doesn't make life any easier.
So no matter what the BJP is keen to do to in terms of furthering economic reforms, or even changing direction in certain areas, legislative logjams are certain to be the biggest hurdle that they will face, especially if political opponents in the Congress and United Front decide, from time to time, to embarass them by not passing critical bills.
The BJP does have the option of going back to the Lok Sabha in case the Rajya Sabha refuses to pass a bill. If the Lok Sabha passes it again, and the Rajya Sabha refuses to pass it again, a joint session of the house will have to be called. This, however, is such a time-consuming and tedious process that several legal experts believe that if the Rajya Sabha refuses to pass a bill, it is defeated, for all practical purposes. The problem is that most of these bills are vital for any semblance of economic reforms in the country. The bills which need to be passed urgently include critical ones such as those on Intellectual PropertyRights (patents), Companies Act, Money Laundering Bill, and Foreign Exchange Management Act. Changes in the Companies Act, pending since the last four years are critical to free companies and allow them more freedom in day-to-day running.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
