Two crucial economic reform bills, including the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015, also known as the Land Acquisition Bill and the GST Bill are unlikely to be passed in the current session of parliament.
This is another setback for the NDA government and a clear indication of what is in store for the government in the next few years. The government has difficulty in pushing through reforms in the Rajya Sabha where it lacks the majority.
Markets which saw a stellar rally in the last few days, did not like this one bit with the Sensex falling a huge 476 points as investors digested the news. In fact, the stock markets completely ignored the positive outcome of Minimum Alternative Tax for investors.
The GST Bill in fact look certain to be pushed through in the Rajya Sabha after it got the support of most of the regional parties, though the Congress had some reservations. The problem for the government is that the GST Bill being a constitutional amendment Bill needs the support of 2/3 of the members of both the houses.
The two major reforms that now seem to be stuck is not good news for the reforms process. The GST Bill many acknowledge has the potential to push the economic growth of the country, while ushering in a transparent tax regime.
The Land Acquisition Bill is another crucial piece of legislation that could push economic development by making it easier to acquire land for industrial development.
The delay in the passage of two bills is not good news for the NDA government which would now complete one year in office.
One has to wait and watch to see if the two bills would now be passed in the monsoon session of parliament. If it is pushed even further, it may send wrong signals to investors.