India News Wrap: November 20
Political Update: Winter Session of Parliament to begin November 26
The previous session of Parliament was disrupted. The government hopes for a better outcome in this session and is focused on doing whatever it takes to pass key legislation.
Crucial bills concerning the Goods and Services Tax (GST), real estate regulation, bankruptcy and power reforms will be considered in the upcoming session. After the political setback for the ruling National Democratic Alliance (NDA) coalition in the recent Bihar elections, the opposition’s confidence has increased. The government may find it hard to pass bills without the required support from the opposition on key reforms. The session will be an important indicator of the political authority that the government continues to command after its defeat in Bihar.
Economic Update: Government renews disinvestment efforts
The government has revived efforts to disinvest from certain public sector companies, which have not proved economically viable.
The Ministry of Finance, which is currently finalizing a disinvestment strategy, is expecting to raise about $10.5 billion from the Cabinet-approved sale of 20 public sector units. In an effort to reduce bottlenecks in the process, the government has also terminated an advisory body set up to review the restructuring of public sector units.
The government has set a target of raising $16 billion through disinvestments this fiscal year. The specificity with which the government has laid out its plans suggests its resolve to continue disinvestment, which is one aspect of its plan to jumpstart the economy.
Policy Update: Government to redefine and clarify e-commerce laws
The government is attempting to remove regulatory uncertainty in the flourishing e-commerce sector while incorporating best practices from around the world.
The e-commerce sector in India has displayed unprecedented growth, but unclear regulations have prevented it from reaching its true potential. The Ministry of Commerce has initiated a process to clarify regulations while reconciling the interests of both brick and mortar shops and e-retailers. The regulations are expected to address concerns regarding taxation and foreign investment. The absence of guidelines to date has resulted in disputes between stakeholders and the state governments.
With these measures, the government hopes to provide the necessary structure to enable further growth in the sector.