Aug 21, 2001|
Lokpal Bill: Awaiting approval!
The Union cabinet cleared six important bills last week. Amongst the most important ones was the long pending Electricity bill, which is expected to facilitate fast track power reforms in the country. The cabinet expects that this bill would obviate the need for each state to enact its own power reform laws.
Another important one was the Insolvency Bill, proposing to create an insolvency fund for sick companies. The contribution to the insolvency fund is expected to come from effectively managed private sector companies. The primary question is whether it is viable to operate these sick units. Going by the available statistics an unviable unit takes an average of 10-12 years before the BIFR decides to finally shut it down. In the meantime, interest and wage bills continue to rise in absence of adequate labour laws in place. FI's are then encouraged to lend soft loans to these units creating a perfect debt trap.
It is expected that a major portion of the insolvency fund would be utilized in paying part of the labour bills of unviable units pending final decision of their closure. If this is the case, is it fair to tax efficiently run companies to compensate for inefficiencies on part of the government? Take another recent example. The government just cleared a wage hike for the beleaguered Indian Airlines engineers. And how are they going to finance it? Increasing the borrowing limit, when the company is already having a tough time servicing its existing debt. But who cares to be proactive? Let it turn sick, and you have another levy on the exchequer. Privatization is a bad word.
To be fair enough, the cabinet at least deserves the credit to take a bold decision of shutting down BIFR, recognizing the fact that the board has completely failed in achieving the desired objectives for which it was created.
There are two more important bills awaiting Union Cabinet approval including the long pending Lokpal Bill. This bill proposes to check corruption in high places, bringing within its ambit even the office of the prime minister and other members of parliament. No wonder the bill has been awaiting the government's nod for several years now!
Another bill, which will be taken for approval, is for revision in the package of MP's. While the bill proposes a modest increase in MP's package, they are demanding a rise of more than 100%! The justification cited by one of the MP for such a substantial rise is that it is extremely difficult to stay honest with the current package! Has the government considered downsizing as an option?
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