Legislation is not the only tool to tackle all issues: Dr Debroy

Normal reaction of any MP or MLA to a problem, even if economic, is generally that it would be resolved through a legislation. However, whether the legislation can be enforced or not is never analysed, says Dr Bibek Debroy

Our laws range from retrograde to obsolete and almost always complex. But, what really are the reasons behind this stagnation? What does it take to get rid of ancient and often expendable laws? For any problem, even if it is economic, most of the members of Parliament (MPs) and members of Legislative Assembly (MLAs) will tell you that it would be resolved through a legislation. Whether the legislation can be enforced or not is never analysed by them. As a result, we have a bunch of legislations that have never even been used.  

Dr Bibek Debroy, an eminent economist, scholar and columnist answered these and other important questions in an informative session organised by Moneylife in Mumbai. Let's take a look at what he had to say.

In the year 2000-2001, the movement for law reform intensified. What were the challenges and achievements?

Dr Debroy said that the process entails several steps. When it comes to old laws, the simplest task is when you identify the entire piece of legislation as redundant. Such a piece can be repealed in its entirety, however this happens very rarely. In the year 2000-2001, when the movement towards legal reform gained momentum, about 200 such laws were identified and amendments to the Civil Procedure Code (CPC) were also passed.

He added that most legislations have dysfunctional sections and are not entirely inapplicable. In such cases, modification becomes difficult as one needs to then examine and identify the particular sections that need to be repealed. In addition, if repealed, one needs to find out whether an alternative legislation needs to be prepared and the job becomes more tedious.

The first step to identification of laws that need to be looked at would be to have an exhaustive list of the total number of statutes. While the central statutes can be numbered down to around 2,000-2,500, the state statutes have still not been counted down in records. This exercise needs much more focus and diligence.

What is the process to repeal a law? How does it vary for different kinds of laws?

Dr Debroy elucidated the process by discussing the different possibilities involved in the birth of the laws. The process for repealment depends on where the statute was enacted. A statute enacted by the union government has a bearing as pe the seventh schedule of the Constitution of India. If the statute is enacted from the Union List, it has to be repealed by the Parliament. A statute enacted from the state list will be repealed by the state legislature. For a statute enacted from the concurrent list to be repealed, a rectification from two-third of the total number of states is a pre-requisite.

In matters of Constitutional Law, he said that an amendment to the Constitution is more difficult than other laws.  

Laws in India are too complicated for a common man's understanding. Isn't there a need to simplify the law?

Dr Debroy agreed that laws should be more lucid. Going a step further, he explained the reasons behind this state of affairs. He also highlighted how apart from just old laws, the Indian Parliament is also known for using legislation as the primary tool to tackle all kinds of issues.

He went on to explain an important doctrine related to the enactment of laws - the discipline of cost and benefit. Under this principle, the legislator studies the gains and losses of enacting a particular law. This principle of discipline of cost and benefit, although globally present, has not been applied in India. As a result, many pieces of legislations enacted post 1991 have been enacted in isolation. The normal reaction of any member of Parliament (MP) or member of Legislative Assembly (MLA) to a problem, even if economic, is generally that they must solve it through legislation. Whether the legislation can be enforced or not is never analysed. Consequently, we have a bunch of legislations that have never even been used! The legislator not only needs to do a cost and benefit analysis, he must also take stock of all the existing laws that impinge on it.  

Reformations should initiate at our legislature. Do you think the way the Parliament functions needs a change? Does the time-span for which the Parliament functions need to be extended?

With the new trend of constant disruptions and adjournments, the dissatisfaction with the functioning of the Parliament is genuine and intense. Dr Debroy threw light on how an average MP is generally not interested in legislation. The position of the MPs are undermined by the standing committees.

Usually, in case of a straight forward draft, the Parliament does not object. This draft, however, has to originate from a certain Ministry or Department. Highlighting the role of the Law Ministry as a catalyst for change, he said that this was the job of the Law Ministry. It has been observed that since 1991, the Law Ministry has not acted as a catalyst for change. In order for this to happen, a prompt follow up by the Law Commission is inevitable. The nature of the bureaucracy of the Law Department also needs to be designed to be more active and pro-reform.  

You may also want to read...
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Shirish Sadanand Shanbhag

2 years ago

Debroy should have highlighted flaws in Constitution of India. For example, Article 269 was applicable (as stated in it) for the first five years of commencement of the Constitution. This article should have repealed on 26.1.1955. Still it continues, in its repealed form.

Vaibhav Dhoka

2 years ago

Law should be relevant to present day.Now take case of rent act which should reappealed immediately.The rent should be adusted as per index every three years.Tenanats earning increases,so as taxes payments but in Bombay rent act you cannot increase rent and claim possession.If such archaical laws are reappealed it will reduce burden from judiciary and houses will be freely available.


2 years ago

I am all for minimalism. India needs less law and more law enforcement. India needs all the "Social Engineering Totalitarianism" to be excised from the Constitution and Laws, to restore a semblance of equality under law and enable the rule of law. India needs to make judges accountable to standards (do we dare utter after Sixty Seven Years of the Republic, competence, integrity and commitment to equity and the rule of law?)other than their representative capacity of some community, caste, gender or other privilege of birth. But, who will bell the cat? India has abolished the Rule of Law and has given up its right to be called a civilization. This is the natural outcome of sixty seven years of Neta-Babu Quota-Corruption Raj where the unaccountable Judges, Cops, Netas and Babus have applied the resources of the state exclusively to their own pleasure, pomp, pelf, and perpetuation. What happened to Suryanelli Kurien? That is but one blip in a continuing saga of corrupt, incompetent judges pampering wealthy and influential criminals and setting an example for the criminality of India, complimenting the criminals who rule the Nation. Civilization and Culture is a distant dream in an India that saw the resurgence under British rule of law for a brief period and is now relapsing to the patch work quilt of looting, raping Sultans, Rajas, Dacoits, and Thugs that prevailed before. Gandhigiri succeeded against the British by turning their strengths (rule of law, equality under law, fair play etc.) against themselves and so weakening them . It cannot succeed against the entrenched, ruthless criminals who have ruled India since 1947 from behind the ramparts of Government or without resort to that excuse.

Want to Invest wisely? Then shut off your Idiot Box!

Followed by Modi wave, Indian stock markets surged up in last few weeks, as usual the business channels has spread the 'noise' by bombarding 'free expert advices.' Know the truth behind the noise, says Ajit Dayal of Quantum!

Over the past few weeks since Narendra Modi lead Bhartiya Janta Party (BJP) received full majority in the Loksabha Election, stock markets have moved up on expectations from the new government. While the new prime minister is yet to implement his plans for the nation and come through on the hope vested in him by the people, business channels are already in a tearing hurry to pass a judgment with their panels and experts.

On 16th May when the Sensex hit 25,000 mark and made a new high, several business TV channels bombarded viewers with free advices from its 'experts' panel'. During last few week business channels have carried following messages,

There is a new India story
Indian stocks are rising to new highs
Individual investors are not in the market - and they must buy equity.
It is not too late, the party has just begun. Buy right now!

Ajit Dayal, director at Quantum Advisors and Quantum Asset Management Company wrote on that, “The problem with the message is that a lot of it is based on excessive hope and expectations.Yes, that hope may materialize but what if it does not? Is there any probability that the expectations are way above the possible reality? Is anyone even discussing that?”

There is no harm in having expectations from the government, but the new government still needs to take the full charge, implement its plans, revive policies and bring reforms, which requires time and cannot be done overnight. While experts are freely advising retail investors to 'Buy', it is the savers who needs to take own investments decisions, after all it is they who will gain or lose and not the experts.

“While there may be a debate on the message and the merits of the message, there can be little debate on the messengers: Most of the messengers are part of a warped and crooked financial system which is out to steal your wallet. These financial experts have done it in the past and SEBI did not shut them down. Like the eternal cockroach, they have survived - and they will steal from you again,” said Mr Dayal.

The experts, who often appear on business channels to share views and advice are part of the financial industry that has taken investors for a ride in the past. Many portfolio management service (PMS) providers, brokers and fund mangers who mismanaged retail investors' wealth over the past years have earned commissions, fees and brokerages for themselves.

The same 'experts' come on TV channels and pass on wisdom about what one should buy or sell.The 'free advice' ends with, “I don't own this stock in my portfolio”, which simply means that 'the expert' is not following his own advice! In addition, no expert discloses his company's involvement with the stock, either as merchant banker or in any other form.

Experts sometimes blame investors for missing the rally and not buying enough equities.

Moneylife has long argued that investors pulled out of the stock market because they found it unsafe and complex. India’s investor population dwindled from 20 million to just 10 million (according to a SEBI-NCAER survey of 2011) in the 25 years under SEBI’s watch. This has happened despite automation, trade guarantees, tax concessions and a sharp decline in brokerage charges over the years. But investors pulled out in droves because SEBI stood by and watched their investments get decimated due to shady practices with no opportunity for redress.

Moneylife wrote: For Indian investors, kyaa achche din aanewaale hain…?
and Moneylife Magazine in its latest issue carried, “Achche Din for Savers?”  which discussed “What should be Narendra Modi’s moves to help savers”, who have been suffering the brunt of capricious and maddening tax rules, apathetic regulators, poor grievance redressal for faulty financial products and rampant mis-selling?

Questions the TV anchors do not ask experts

Most of the times, anchors on TV news channels do not ask the tough questions. Try to recall the last time a business channel TV anchor asked the 'expert' about his own performance and practices!

Mr Dayal said business channel anchors should ask following questions to their guests and experts:

Did your real estate fund give the spectacular performance that was so implicitly promised?
Do any of you have insurance companies which sell ULIPs? How did those products reward the agents and how did they perform for the investors whose money was used (without their knowledge) to pay the agents for roping them in? Can you describe how your PMS products were run? Is it true that your employees were given goals to "convert capital to revenue in 12 months" which is a way of saying that make the client trade so much that his corpus gets converted into broking commissions?
Do you have any view on the recent rule from SEBI that  effectively reduces the number of fund houses that can launch mutual funds?
Does your CFA degree have a charter of being honest to your clients?
Can you tell me, honestly, that this is a great move for your clients and for investors in general?
How come you are so rich when your clients are, typically, poorer from your advice?

Mr Dayal says, “Don't hold your breath for such important questions. Your friendly business TV channel anchor plays along with the web of lies that emanate from the well-heeled guests. Today's guest is tomorrow's advertiser: when the next bull market starts and the IPO machine pumps and dumps you the next DLF, Suzlon, and Reliance Power, those advertising revenues will be chased.” He said, “A roaring bull market is good for all - but not for you. The retail investors, are the insects the financial firms wish to capture and squeeze your wallet for its contents.”

“We know that the market is surging. But has your anchor told you what else is rising - besides their ratings? Have the guests on their shows told you what else is galloping - besides their bonuses? Does the financial service industry have a right to make the retail investor feel stupid for being 'under-invested' in equity? The fact is that the same people who now appear on TV lied to you and misled you. They were not punished. They were rewarded. You were taken to the cleaners. Your favourite business TV Channels are doing a pretty lousy job of protecting you from the financial mafia. The regulator, meanwhile, has no concept of how to regulate the industry: their committees are populated with the same people you see on TV,” says Ajit Dayal.

As Moneylife always suggests to its readers to avoid taking free 'advice' and 'stock tips' for investing. Investors can eliminate speculative activities by proper research and analysis. Some of the biggest private equity (PE) investors, foreign institutional investors (FIIs), venture capitalists, and mutual fund companies also make wrong decisions. Investors cannot outsource the job of assessing risks associated with their investments, selection of right stocks, and right time to enter and exit. Hence, savers need to shut off their 'Idiot Box' and avoid the 'noise' that business channels make and do their own research to take informed decisions while investing.



kothapalli srinivasu

2 years ago

valuable article

Vaibhav Dhoka

2 years ago

This would be like paid NEWS.

Karan Rajpal

2 years ago

There was a single TV anchor who asked tough questions- Ashu Dutt, and he's been thrown out of each channel he was a part of.

I remember me and my father watching the channels where he anchored, and laughing uncontrollably as he took promoters' and financial advisors' pants down.


2 years ago

well done!you have struck the nail at the right place.can SEBI do thing something to fight the evil?


2 years ago

" Their committees are populated with the same people you see on TV." - You just cannot repeat this sentence too often.

TV channels hosting these people refer (certify) them as 'Experts'.

Remember, these 'Experts' were recommending minimum 10% exposure to gold when gold was around Rs.33000/- .

Suiketu Shah

2 years ago

100% correct.There shd be a disclaimer (like in cigar ads) saying:-Watching stock tips is injurious to health!!!!!!

Utter unadulterated bs the so-called "stock experts" on TV talk increasing chances of brain haemmorage.

A World without Medicines
The world without (reductionist) medicines will be a boon to mankind. Take a look at the example of cholesterol-reducing drugs
“The groundwork of all happiness is health.”— James Leigh Hunt (1784-1859)
The latest Reader’s Digest has an article with the above-mentioned title where the author seems to be frightened of a future world without medicines, as drug companies will no longer be interested to make good drugs if the rules allow medicines to be manufactured and sold with generic names. Generic drugs remove the present day power of the pharma lobby to sell the same medicines with their patent for anywhere between 1,000-5,000 times the cost! I pity the author, Catherine Kane; obviously, she is a non-medical person and looks like an agent of the pharmaceutical corporate monstrosity. 
I, as a doctor and medical teacher with more than half a century of experience, am daily praying for a world without reductionist chemical medicines for the good of mankind. The leading cause of death, today, seems to be the infamous adverse drug reactions of those reductionist molecules.
Most, if not all, diseases begin in the human mind as that is the only reality in this world of biocentrism. This world is created by our consciousness. In this context, there is no room for reductionist thinking. “Positive sciences do not answer the question ‘why’,” wrote Nobel Laureate physiologist Charles Sherrington. They can only answer ‘how’? 
Let us take a common example of that ghost—cholesterol—as a disease. If your cholesterol goes up, no one asks or answers the question: Why does our body cholesterol go up while it is being manufactured in our liver for our own survival? We have a limited reductionist thinking—cholesterol is up; it needs to be brought down! We create drugs—one of the best money-spinners—which create misery with their side-effects.
Cholesterol has many functions in the body. Trillions of cells in our body have their cell membrane made up of cholesterol. Billions of cells age and die everyday and billions of new ones are replaced, needing lots of cholesterol for good health. 
Cholesterol is needed to manufacture steroids, or cortisone-like hormones, including vitamin D and the sex hormones testosterone, oestrogen and cortisone. This, in turn, controls  myriad  bodily functions. Bile acids are manufactured in the liver with the help of cholesterol. Bile acids are essential for digestion and absorption of fat-soluble vitamins such as vitamin A, D, E and K. 
Cholesterol is also needed for the formation of the myelin sheath, a neuron consisting of fat-containing cells that insulate the axon from electrical activity. This ensures proper function of our brains by aiding the route of electrical impulses. The absence of cholesterol might lead to loss of memory and difficulty in focusing. Cells cannot talk to each other without the help of cholesterol. Such a vital substance, 80% of which is produced in our own liver, cannot be lowered forcefully by drugs without serious collateral damage.
Looking holistically, the body produces excess cholesterol only when it needs it badly! When one needs more steroids, bile acids, myelin and cortisol, the liver pours in more cholesterol into the circulation. Steroids and cortisol go up, when one is in the fright-flight-fight mode! Anger, jealousy, fear, greed, hostility, pride and superego produce the fight-fright-flight state. The latter is needed in a dangerous situation like when you see a tiger in a forest to run away, but not on a chronic basis. 
If one is in that dangerous mode, on a daily basis, cholesterol goes up seriously. Similarly, overeating, especially fatty food and fatty meat, demands more bile acids for digestion and the liver responds by producing extra cholesterol to assist in the making of fatty acids in the liver. Sedentary living does not encourage cholesterol catabolism either. 
When the question ‘why does the cholesterol go up in the first place’ is viewed with  holistic glasses, the foolish (reductionist) need for drugs to lower cholesterol disappears. All that one needs to do is to get into the parasympathetic mode in daily life with Yoga, praanayaama, daily exercise and moderation in eating which, together, would eventually obviate the need for high cholesterol production in the liver. 
One can see the double-whammy here. The extra work for the liver to manufacture extra cholesterol for the body’s needs in the fight-flight-fright mode is removed saving the liver from chronic damage while the need for the deadly anti-cholesterol drugs disappears totally. One can, at the same time, enjoy a proper meal like any one else as long as one remains within limits. No need to shun any food, including fats in moderation. The immune system, the body’s inner healer, works wonders in every situation where the body physiology goes astray as long as we live sensibly in tune with nature.
The world without (reductionist) medicines will be a boon to mankind. Herbal medicines are good, in the unlikely event that the immune system needs assistance. The greedy drug lobby could explore that area for making their living in peace while providing good herbal medicines produced with good manufacturing practice!




2 years ago

I was thinking that Cholesterol as a dangerous one for humans, but now I understand it as Nature Gift for humans, doing a wonderful function. All said done, Exercise, Walking .. Most relevant for each and everyone. Dr.Hedge brought out beautifully.


2 years ago

Good article relevant modern world.


2 years ago

Another great article highlighting the importance for bodies natural healing processes and adverse impact of additional chemical interventions.

Simple Indian

2 years ago

A very insightful article by Dr. Hegde. Didn't know cholesterol is so important for body, as modern medical fraternity seems to have given it a bad name, just to boost sale of medicines to 'control' cholesterol (though there are two types of them, one believed to be good-HDL, and one bad-LDL).
Yes, eating in moderation, considering what suits one's health/metabolism is important. Eating the right food and in moderation is important, rather than blaming food for our ill-health. It would indeed be a dream if we could live in a medicine-free world.

Pramod Bhave

2 years ago

This article has put the trditional villon the colestrol in an entirely different light.Thankd to Dr Hegade

Rajenra Muley

2 years ago

Excellent article. Explained in so simple manner to be understood by a layman.
The information needs very very wide publicity for the benefit of mankind.

Ramesh Poapt

2 years ago

Thanx DrHegde! Pl continue to present such articles. I didnt find much from your side in recent period,hence I had to request ML b4 few days. excellent!! Sir, can you please guide on how to get rid of danger- free radicals and science behind it please?


2 years ago

It is like Government. We need less medicines and more healing. It is extremely doubtful whether all the medication unleashed on the World has made it a safer and healthier place. Apart from pain management, preventive medicine and cases such as dentistry and orthopaedics where the body's natural healing process needs more help, the rest is like the DRDO and the Governance and Courts of India. Intended solely to provide unaccountable employment and lavish life styles to the corrupt and the incompetent. I am all for minimalism. I feel that the Princely State of Mysore had better and more effective hospital, doctors and health care that has been progressively commercialized and degraded to the sole benefit of the Neta-Babus.

Rajeev Juneja

2 years ago

One of the best easily understood articles on cholestrol in the human body: Excellent awakening...

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