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India Should take Decisive call on 5 keys to Derisk Foreign Investment
- Published on 01 June 2019
India should put expropriation and taxation hazards faced by foreign companies on the top of new blueprint for economic growth. Preparation of new agenda is customary in India after the formation of new Government or the return of ruling alliance to power.
The reforms agenda for foreign investment should comprise 1) Time-bound negotiation of new bilateral investment treaties (BITs) with 58 countries with which India terminated the flawed ones. BITs serve as beacon for prospective investors.
2) Finalization of model Centre-State investment agreement (CSIA) for effective implementation of BITs. Mooted in February 2016, CSIA is to be signed by Centre (national government) with state (provincial) governments.
3) Setting a limit on dogged litigation waged by Government as defendant against over a dozen arbitration cases launched by foreign companies.
4) Shedding reluctance to be party to certain international pacts such as Energy Charter Treaty and investment facilitation framework being explored under World Trade Organisation (WTO).
5) Reconsider Arbitration and Conciliation (Amendment) Bill, 2018 keeping in view concern voiced by different quarters over some of the bill’s provisions. Couple this with enactment of a new law to protect both local and foreign investments.
Political NYAY Aplenty but No NYAY to Legal Justice
- Published on 20 May 2019
(Swachh Office. Image Courtesy: swachhbharaturban.gov.in)
Legal justice is getting injustice in this season of political NYAY (justice). Both Bharatiya Janata Party (BJP) and Congress Party have banished long overdue National Litigation Policy (NLP) from their respective manifestos.
And populism-smitten voters are least bothered about speedy justice for all. VVIP residents in Lutyens Delhi might get justice at the drop of gavel. A terror mastermind might get its appeal heard at mid-night. The hapless Aam Aadmi has, however, no option but to stand in queue for justice for decades.
Both BJP & Congress have turned deaf & dumb to the Supreme Court’s fervent appeal to launch and implement NLP. The appeal figured in two separate judgments delivered during 2017 & 2018.
“When will the Rip Van Winkleism (RVW) stop and Union of India wake up to its duties and responsibilities to the justice delivery system?”, stated the apex court in a verdict that focused on NLP delivered on 24th April 2018.
RVW is derived from Rip Van Winkle, a character who slept for 20 years in a story penned by Washington Irving. He found the world changed when he woke up.
The Court posed RVW query after making a stinging observation: “Nothing has been finalised by the Union of India for the last almost about 8 years and under the garb of ease of doing business, the judiciary is being asked to reform. The boot is really on the other leg”.
Gauge Twin Shocks of Demonetization & GST Through Corporate Eye
- Published on 03 May 2019
(Image Courtesy: BJP)
Modi Government “has been able to take many decisions which are historic and has ushered in a comprehensive and fundamental transformation”. Such decisions include Demonetisation and GST, according to BJP Manifesto for Lok Sabha polls.
Prime Minister Narendra Modi himself continues to defend twin disruptive decisions. He rubbishes reports of their negative impact in his speeches & interviews.
The Opposition, on the other hand continues to bemoan the problems resulting from these decisions. The Opposition stance is aptly reflected in a recent headline: “Rahul Gandhi says NYAY (minimum income guarantee scheme for poor) will revive the economy hit by demonetisation, GST”.
Amidst these contrasting positions, how do citizens capture apolitical picture of impact of twin decisions on economy? Leave aside independent studies, reports of multilateral institutions & credit rating agencies and authoritative opinion of experts?
The answer lies in researching and analyzing what companies think about it quietly. The companies share their perceptions about economic outlook forthrightly before the international investors. They do so miserly before domestic investors, taking advantage of weak disclosure requirements in India.
A glance through corporate disclosures to foreign investors in 2019 show that companies are indeed worried about the negative impact of both demonetization and goods and service tax (GST).
They have also voiced concern over uncertainty about likely impact of income tax-related General Anti-Avoidance Rules (GAAR), retrospective taxation and other taxation risks.
Balance Mr. Modi's Phobia of Coalition Governments with Facts
- Published on 23 April 2019
(Narendra Modi. Image Courtesy: PIB)
“Even in coalition governments if proper leadership is there and we can achieve good governance and take strong steps against forces that work for destabilizing the nation. Accountability as we all agree is one of the key components of good governance” stated Narendra Modi while delivering a speech on good governance on 5th June 2010.
Mr. Modi’s wisdom was independently articulated by Commission on Centre-State Relations (CCSR). When Mr. Modi was Gujarat Chief Minister he often hailed 7-volumes report of CCSR and pitched for its implementation.
Mr Modi, however, sustained UPA’s policy paralysis on CCSR recommendations submitted in April 2010. This is a separate story in itself.
CCSR, often referred to as Punchhi Commission, concluded: “Coalition government can be looked at as a sign of genuine accountability of the uniquely Indian polity and its system of governance”.
CCSR observed: “Coalition politics need not be inherently problematic as long as the parties follow the rules of the game and respect the authority of the law and the Constitution. It may slow-down the pace of development occasionally; but the practice of evolving the ‘Dharma’ of common minimum programme did help to overcome difficulties while controlling the excesses of the dominant coalition partners”.
We need to recall such observations of reputed panels & BJP’s own forgotten statements, etc. This might help voters balance Modiji’s sudden phobia of coalition politics. The phobia should also be countered by mulling over failures of regimes led by parties that won absolute majority.