Reforms & Governance under Modi

Doing it right is as important as doing the right thing. How does the government measure on this count?


A year-end rush of action is probably Narendra Modi’s way of responding to the growing impatience for the strong decisive policy changes that everyone has been expecting from him.


Among a slew of decisions, the government has promulgated several ordinances covering land acquisition, coal mines, arbitration and insurance. Will achchhe din follow in 2015? 


We do hear that Mr Modi, his ministers and bureaucrats have been working round-the-clock. But many of us have been dismayed at the noise over religious conversions dominating public discourse, while there has been less action on the prime minister’s (PM) election promises. And when important Bills needed to be passed by parliament to push reforms, fringe elements in the Bharatiya Janata Party (BJP) gave the disparate opposition frequent opportunities to gang up and prevent the Rajya Sabha from functioning.
Foreign investors are clearly more optimistic about policy reform being on the right track, despite 10 years of watching reforms derailed under the Congress-led alliance. They are even impressed by the ordinances. 
Chetan Ahya of Morgan Stanley India, in his year-end note, says that GDP growth shows signs of revival after the ‘sharp deterioration’ in recent years. He flags the key drivers of growth as: land reforms to ease acquisition; labour flexibility for the formal sector; tax reform, especially introduction of the goods & services tax; revival of infrastructure investment and improving the overall ease of doing business. 
On ease of doing business, Morgan Stanley lists the government achievements as: online environment and forest clearances with prescribed timelines; project monitoring and plans to set up an integrated approval process (for all ministries) by March 2015 and steps to remove the discretionary power of labour inspectors to simplify compliance of labour laws. 
All these are positive developments that will reduce a big source of harassment for industry but have not been discussed in the media much. Indeed, there is much to be optimistic about Modi sarkar’s actions in the last days of 2014. But there are concerns too. 
While the ordinance route signals that the government means business, the fact is that important legislative changes are not going through the parliament, nor is there any attempt at public discussion or taking all stakeholders into confidence. The government is coming across as one that only talks to business and chambers of industry. 
We need the PM to employ his famous communication skills and use his mann ki baat chats to explain his policy direction. We need to know how these policy changes will improve governance, reduce corruption and make policy-makers accountable to the people. On 1st January, the PM took to twitter to explain why NITI Aayog would replace the Planning Commission; but he has remained silent on why his government ham-handedly blocked dozens of websites on 31st December. This sends contradictory signals from our most skilled communicator and social-media-savvy PM.  
The government must realise that people are keenly interested in issues that affect them. It is this interest that brought people out to vote and gave the BJP a sweeping victory in the 2014 general elections. Unfortunately, the government seems in danger of losing that connect. Social media interactions have been largely reduced to greetings, condolences and photos of ministers’ meetings. 
Media reports leave ordinary people clueless about the motive behind some attempted bailouts, the long delay in public sector bank appointments, the transfer of honest ministers and bureaucrats. At the same time, even media-friendly Cabinet ministers are repeatedly being forced to clarify twisted media reports. A government that does not clarify its actions also faces the prospect of coming across as a prisoner of business lobbies, especially when the shady businessmen are among the first to praise the changes the government is making.
Many badly drafted laws introduced by the United Progressive Alliance (UPA) need to be amended if India has to attract investment. But these need to be done with proper discussion with all stakeholders. 
The hasty amendment to the Companies Act, 2013, after several clarifications, is particularly perplexing. The NDA’s (National Democratic Alliance) majority in the Lok Sabha ensured that the Lok Sabha swiftly cleared the Bill, but it is anybody’s guess what happens when it comes up again in the Rajya Sabha. 
What we know for sure is that the Companies Act, 2013, was draconian when it came to corporate compliances and directors’ responsibilities, but had drastically tightened provisions to protect depositors. The ministry of corporate affairs (MCA) has done nothing to act on those provisions, despite the long list of companies refusing to refund company deposits or pay interest. Will someone explain how the amendments to the Act were decided?
The ordinance amending the Land Acquisition Act, 2013, is more worrying. Here, too, an amendment was necessary. But, given the recent history of land acquisition, the PM could have taken people into confidence, instead of allowing the Congress and its supporters to spin it as a pro-industry legislation implemented by stealth. 
In fact, history is in BJP’s favour. Soon after it came to power, the UPA government let loose a land grabbing frenzy among Indian industrialists in the garb of special economic zones (SEZs). 
Public protests, often violent ones, finally brought the whole SEZ mania to a halt and, as elections neared, the Congress decided to swing the other way in the election year such that it made land acquisition almost impossible. Worse, it did not even make the effort to harmonise the new law with 18 other legislations that had different compensation provisions. 
The NDA ordinance attempts to set things right. Importantly, it has left compensation (4x market value in rural areas and 2x in urban areas) and rehabilitation and resettlement provisions untouched, despite pressure from industry. The ordinance has diluted some norms pertaining to environment clearances and exempted five types of acquisitions from the consent clause. 

But, by springing an ordinance on people, Mr Modi has created an opportunity for motivated spin on the negative implications of the land acquisition Bill for ordinary people. Property tycoons, like Niranjan Hiranandani, who face allegations of land grab, deepen the suspicion, when they are first off the mark with fulsome praise for the government’s action. 
Mr Hiranandani’s talk of ‘affordable housing’ in brand new smart-cities is sure to get peoples’ backs up when most of us want really stringent regulation and penalties for the real-estate sector.
According to Morgan Stanley, over US$300 billion worth of projects, especially the stalled public-private partnerships (PPP), may be expedited by amending the Land Acquisition Act. 
We don’t know if that is really good news, because we would like to see more transparency and accountability in PPPs. A former bureaucrat describes PPPs as ‘passing public-property to private hands’. These are not subject to scrutiny under the Right to Information (RTI) Act and, in some cases, the PPP agreements have been found missing. 
The PM, undoubtedly, has a tough job. He has to kick-start the economy but also to ensure better governance and regulation. He has to deal with a yawning fiscal deficit and bloated government expenditure, and also avoid burdening people with more taxes and keep public investments going simultaneously. 
He needs the support of opposition parties in parliament to push through key legislation, but has also to deal with the frequent controversies created by his own ministers. The Union Budget of 2015 and the ensuing budget session of the Parliament will throw light on whether Mr Modi wants to do the right things the right way.



sanjeev naik

2 years ago

before talking in both the directions, ask yourself a question, why does RSS take conversion activities when parliament is sitting in winter session? and what happened to that activity now? why sudden silence... Modi clearly knows the bills cannot be passed in parliament straight a way. so make chaos and follow ordinance route.. he is doing right thing for this undisciplined country...

MG Warrier

2 years ago

I too am impressed by the communication skills of Prime Minister Modi. I had sent copies of my book "Banking, Reforms & Corruption: Development Issues in 21st Century India" to several people involved in policy formulation in different capacities. I received a communication from PMO conveying PM's thanks for sending the book to Prime Minister. I consider this as an indication of PM's receptiveness to thoughts from public.


Kiran Aggarwal

In Reply to MG Warrier 2 years ago

u r plugging in your book
which is very bad to eyes and
sound despo

MG Warrier

In Reply to Kiran Aggarwal 2 years ago

I value your sentiments though you are the only person who took objection. Thanks Take care

B. Yerram Raju

2 years ago

The article is just a good sample of acts of good governance that are getting delayed for want of pragmatic action in the place of lofty and pompous announcements.
The country is young. Education reforms are crucial as right from the primary to higher and technical education are in morass. Vice Chancellors are appointed on the basis of caste and region and not on the basis of merit. Teachers likewise are appointed on the basis of reservations that continue after 65 years of independence in the same format. Reservations like the subsidies need reform if the governance in education and health sectors has to improve significantly.

Kiran Aggarwal

2 years ago

Fantastic Article

refined results and observations from Mrs. Dalal !!

Land ordinance- 5 modifications
is a route for old loot and grab
taking all rights of farmers of right compensation and asking .
Infact in technical terms it is not even ordinance.

I knew BJP has more Tamasha !! than substance !!
Without effective rules and governance for all and
public discussion of govt . policies
no Business or economy can prosper and generate revenues !!
Electoral reforms r much needed
5. The Problems

5.1 In all of the above reports and literature, the main problems that have been generally recognized and debated are as follows:
Increasingly money hungry elections leading to unethical, illegal and even mafia provided electoral funding. The terribly high cost of elections in turn, has led to increased corruption, criminalisation and black money generation in various forms.
With the constituents/electors being the same for all directly elected representatives from the lowest Panchayat level to the Lok Sabha level, there are competing role expectations and conflict of perception e.g. the constituents expect even members of the Union Parliament to attend to their purely local problems.
With the electorate having no role in the selection of candidates and with majority of candidates being elected by minority of votes under the first-past-the-post system, the representative character of the representatives itself becomes doubtful or so to say their representational legitimacy is seriously eroded. In many cases, more votes are cast against the winning candidates than for them. One of the significant probable causes may be the mismatch between the majoritarian or first-past-the-post system and the multiplicity of parties and large number of independents.
The question of defections and the Tenth Schedule.
Inaccurate and flawed electoral rolls and voter ID leading to rigging and denial of voting right to a large number of citizens.
Problems in the conduct of elections:

Booth capturing and fraudulent voting by rigging and impersonation.
Flagrant use of raw muscle power in the form of intimidating voters either to vote against their will or not to vote at all, thus taking away the right of free voting from large sections of society and distorting the result thereby.
Involvement of officials and local administration in subverting the electoral process
Engineered mistakes in counting of votes

Criminalisation of the electoral process - increasing number of contestants with serious criminal antecedents.
Divisive and disruptive tendencies including the misuse of religion and caste in the process of political mobilization of group identities on non-ideological lines.
An ineffective and slow process of dealing with election petitions, rendering the whole process meaningless.
Fake and non-serious candidates who create major practical difficulties and are also used to indirectly subvert the electoral process.
Incongruities in delimitation of constituencies resulting in poor representation.
Problems of instability, hung legislative houses and their relation to the electoral laws and processes.
Last but not the least, loss of systemic legitimacy due to decay in the standards of political morality and decline in the spirit of service and sacrifice in public life.

5.2 Elections in parts of the country have become synonymous with intimidation of voters specially poorer sections, rigging, booth capturing, violence against and even killing of candidates and political workers, connivance of officials at the polling stations and at times a complete hijacking of the polling process by unruly and criminal elements. Unfortunately, over a period of time local police forces have also allegedly become involved in the above by becoming partisan and by being guided by local loyalties, caste considerations, as well as by being easily bribed for connivance. What is disturbing are the sporadic allegations of even the central forces acting in a partisan way in some places. Reports of above irregularities in the conduct of elections have become so commonplace that these are not news anymore. Many suggestions have been made to address these issues and most relate to implementing our existing rules and laws effectively. But experience has shown that laws in a low accountability society like India are known more for violation than for any degree of compliance.

Source -

Bapoo Malcolm

2 years ago

The appellation of Mr. or Mrs. or even 'Her Royal Highness' are passe. TIME was the first to boldly introduce this change 30/40 years ago; and explain it to boot. No one gets smaller or bigger by being given a title. Even courts, and judges themselves, want to do away with the "Lord" bit. "Sir" should suffice, they say.

At the most, the initial reference may carry a suffix by the way of a title, but not later. It is to distinguish between the sexes because one may wonder. Is Tony for Anthony or Antonia? The title would clarify. Therefore Obama is Obama, no more. It's just Elizabeth, that's all. Cleopatra is it. As is Tutankhamen. And Confucius,Alexander or Ashoka. Great people need no titles. The small ones will give an arm and a leg for them. Sir Donald Bradman is still called Don Bradman.

Incidentally, the explanation above refers only to print. POTUS is, in conversation, referred to as Mr. President, the Queen as Your Highness, and Modi as the Hon. Prime Minister. And Sir Donald.

It's high time we also got rid of the .....ji, an Indira remnant. And by the way, the 'ji' amongst Parsis refers to 'jeevta' or alive. Unfortunately, in the overdose of fawning, even the deceased are suffixed with a ....ji! The Parsi precedent would be 'Behsti Rustom", meaning a resident of Heaven. Hopefully.

We excel at hypocrisy.

Bapoo M. Malcolm,
Advocate, Bombay High Court.

Vipan Mahajan

2 years ago

At least have the courtesy of addressing PM as Mr. Modi

Mr Prabhu, Mumbai local train travellers need simple solutions, not fancy SPVs

A cyclical timetable, more frequent trains and fewer halts can bring a big relief for 80 lakh daily commuters in Mumbai


I have been travelling in Mumbai's suburban rail network for more than 15 years and for the first time, I saw what difference it makes to have somebody from the city as Minister for Railways. After the chaos on Central Railway on 2nd January, Suresh Prabhu, the Minister has announced setting up a special purpose vehicle (SPV) to address issues.


We will work with Maharashtra Govt to create a separate SPV to address State issues. Discussed with chief minister (CM). Both Govts will work on it,” the Rail Minister tweeted.


After the violent protests at Diva, Prabhu tweeted, “Suburban rail network is under severe stress. Long neglected. Drawing up plan to revamp it on top priority. Need time to implement. Huge task."


This is exactly what I wrote in April 2012. While commenting on a fire in a signal cabin near Kurla that time, I wrote, "Any small incident like signal failure can bring the suburban rail network across Mumbai to a halt. The midnight fire in a signal cabin near Kurla burnt down signal gears and cables. But then why is there no backup system in place? Why on earth is the Central Railways running its entire system on a single line of resources?"


The once-efficient suburban rail network is the lifeline of Mumbai. However, over the past two decades it is creaking under the weight of passenger influx, corruption and lack of investment in upgrading infrastructure. The extraordinary crowding of trains and poor commuter facilities such as stations makes the Mumbai suburban train system so prone to accidents that more than 10-12 people die in railway mishaps every day – a figure that would have made front-page news anywhere else in the world but meets with apathy in India.


The Times of the UK calls Mumbai’s local railway network as one of the deadliest in the world. According to a report by the High Level Safety Review Committee set up by the government in September 2011, about 6,000 people die on Mumbai's crowded local rail network every year. The committee, headed by Dr Anil Kakodkar, former chairman of the Atomic Energy Commission, recommended that the grim situation on Mumbai's suburban rail system needed to be tackled on a war-footing.


Three years after the report, nothing much has changed, except now Mumbai has somebody from the neighbourhood who understands the problems, vulnerability and cracking infrastructure of the suburban network, the lifeline.


Although Prabhu’s idea of setting up an SPV would take care of funding issues for Mumbai's suburban rail network, there are several other things that can be done immediately without spending a single penny.


One of them is re-testing the cyclic timetable. Traditional approaches of increasing capacity by increasing the number of coaches in rakes have not resulted in any improvement in the problem of overcrowding. The situation is further aggravated with frequent delays and uneven frequency of trains. So why not to try cyclic timetable?


After doing a lot of research over years, septuagenarian Dipak Gandhi, chairman of Mumbai Suburban Railway Passenger Association (MSRPA), and his colleagues have prepared a cyclic timetable, which can reduce passenger load on each local train by about 30% to 40% and also cut the travel time by 20% to 25% for long-distance commuters. The cyclic timetable also makes it possible to introduce 30% more services with the same number of rakes and tracks through super-fast and sector wise services.


Cyclic timetable as the name suggests is a timetable, which repeats itself after a fixed duration. A key feature of this timetable is that commuters do not have to memorise the whole timetable. All that they need to remember is the cycle time at which a train repeats itself; thus, if the cycle time is 12 minutes then even if someone has missed his train he knows that he will have to wait a maximum of 12 minutes to catch the next train. (Read: Reduce halts to gain speed on Mumbai local trains, say experts.


A simple mathematical analysis done by Rajaram Bojji, former managing director of Konkan Railway and inventor of the anti-collision device (ACD) also shows that the use of cyclic timetable can reduce the turnaround time for a local train by around 30% as well as waiting periods for commuters.

Another issue is mis-management of train traffic. For example, on Friday, an overhead wire was broken near Thakurli, which closed one of the slow tracks. What the Railways did was to divert all trains running on slow tracks to a fast track. Already the fast track carries all fast local trains, mail/express and goods trains. When you add slow trains on this track, it simply crumbles.


Even if the slow trains are diverted, then it should be done only for a particular stretch (between crossings) instead of a bigger route that affects more number of stations and commuters. For example, when there was issue at Thakurli, all slow track trains could have been diverted back on the same slow track after Diva instead of making it run on fast track till Thane. At the same time, one or two special trains could have been arranged to start from Diva so that the crowd could have moved to their destination. However, no slow train (coming from Thane towards Kalyan) was terminated at Diva and sent back towards Mumbai. This made commuters, who were waiting for a local train for more than an hour restless and then angry. Some local elements also added fuel to the fire and it erupted.


Last but not the least is need to have parallel roads, especially for the stretch between Thane to Kalyan. On Friday, I along with lakhs of commuters, was forced to walk down the rail track from Diva to Dombivli as there is no other mode of transport exists. Not to mention the loot of commuters at Dombivli station by auto-rickshaw drivers. They were demanding Rs500-Rs600 from commuters just to reach Kalyan as against the normal fare of Rs20-25 per head. There were some buses plying but were too crowded, in addition to unending queues.


In 2012, Dinesh Trivedi, the then railway minister, while speaking at an event organised by Moneylife Foundation, had said that the entire railway system is a mess and there is a urgent need to modernize it so that people can travel safely with some dignity, unlike what every commuter, especially on Mumbai's local trains experience every day. “There are no maintenance contracts given by the Railways and they are carrying out even the basic repairs on ad-hoc basis,” he had said.


Remember, Mumbai commuters are 'trained' to be patient by the hardships of daily commute. Nevertheless, they do have an anger building against the system, especially modes of public transport. And unless there is some visible improvement in the suburban rail network, the anger may erupt anytime and anywhere.


Hope, the local man Suresh Prabhu looks into these suggestions and help ease the life (of commuters) and (rail) line before it is too late.



Dr. Rakesh Goyal

2 years ago

Mr. Prabhu travels by road in Mumbai. How will he know the pains of local train travelers?

Further, now his railways related eyes and ears must be same set of railway officers, who are instrumental of making railways a chronic cardiac patient and have vested interest in keeping railway system sick.

The first step for Mr. Prabhu must be to define minimum acceptable and measurable service levels. This has to be done with consumers of railway services. Then he need to propose the detailed and point-by-point action plan with deadlines to provide these minimum acceptable services. Then he need to calculate cost of plan. SPV will be an instrument to fund the cost and recover the money. All these must be done with social and technical audit in a transparent and accountable method.

To propose some SPV without defining - what to do, is normal bureaucratic avoidance tactics.

MCA charts roadmap for implementation of new Accounting Standards

The IndAS once applied will converge accounting procedures in India with the IFRS standards


The Ministry of Corporate Affairs (MCA) released a revised roadmap for implementation of Indian Accounting Standards for companies other than banks, insurers and non-banking finance companies. 
The IndAS standards as the Indian Accounting Standards are known, shall be applicable on a voluntary basis for financial statements for accounting periods beginning on or after 1 April 2015, the MCA said in a release on Friday, 2 January.
The IndAS standards will become mandatory for the said class of companies for accounting periods beginning 1 April 2016, for companies whose debt or equity is listed anywhere, or has a net worth of Rs500 crore or more.
Other companies with net worth above Rs500 crore are also to be included, and this will also be applicable to holdings, subsidiaries, JVs and associate companies with net worth of or above Rs500 crore.
The MCA release also said that the IndAS would be applicable to, "On mandatory basis for the accounting periods beginning on or after April 1, 2017, with comparatives for the periods ending 31st March, 2017, or thereafter, for the companies specified: (a) Companies whose equity and/or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having net worth of less than Rs500 crore. (b)Companies other than those covered in paragraph (ii) and paragraph (iii)(a) above that is unlisted companies having net worth of Rs250 crore or more but less than rupees Rs500 crore."
Sai Venkateshwaran, Partner and Head – Accounting Advisory Services, KPMG India said, “The adoption of these IFRS converged standards will also go a long way in enhancing the transparency in and quality of financial reporting by Indian corporates, as Ind-AS is expected to fill the many gaps in Indian GAAP, and will also aid as one of the measures to take India up in the governance and transparency rankings globally.”
The MCA specified what kind of companies the IndAS would be mandatory for. However, Venkateshwaran explained that, “while the revised roadmap applies to companies other than banking companies, insurance companies and NBFCs, it may become applicable indirectly to such entities as well, if they are a subsidiary, joint-venture of associate company of an entity otherwise covered under the roadmap. Accordingly, such entities may need to adopt the Ind-AS standards at least for the purpose of consolidation by the parent or investor company.”


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