Economic reforms stalled as India’s raucous parliament closes

December 24, 2014 – India’s parliament ended its winter session yesterday after protests over religious conversions stalled passage of the new right-wing government’s economic reforms agenda.

Angry lawmakers disrupted parliament’s upper house, accusing Hindu hardline groups linked to Prime Minister Narendra Modi’s ruling party of forcing or enticing religious minorities to convert to Hinduism, leading to it shutting down daily over the last fortnight.

Shouting matches, unruly behaviour and general uproar prevented headway on key long-pending legislation that included a Bill to open the insurance sector to foreign players and a tax to create a single internal market.

The insurance Bill involves hiking the sector’s foreign direct investment cap to 49 percent from 26 percent – seen as paving the way for billions of dollars to flow into the industry, with India’s 1.2-billion population badly under-insured.

The long-awaited goods-and-services tax (GST) would end India’s patchwork of taxes under which each state can tax different commodities at different rates. The move would stop rival states competing for business through taxes.

Another important Bill lined up for clearance in the upper house aimed to overhaul the coal sector. Many of the Bills have been put over to the next session which begins in February.

There were 37 Bills scheduled for debate and clearance during the session that began on November 24, but lawmakers in both houses managed to pass only 10, according to PRS Legislative Research, a New Delhi-based think-tank.

The lower house spent nearly 130 hours conducting business and passed 17 Bills while the upper house cleared only 10 in 75 hours, PRS said.

Regular suspension of parliamentary proceedings is common in the world’s largest democracy, where opposition lawmakers often resort to obstruction to denounce government policies and scandals.

Modi’s Bharatiya Janata Party (BJP) won the biggest mandate in 30 years in May, raising hopes it would have the numbers to control parliament and ensure the smooth passage of legislation. But the BJP lacks a majority in the upper house, where protests have regularly dogged sessions.

The latest have seen the opposition demand Modi make a statement regarding poor Muslims being coerced into converting to India’s majority religion.

Modi has made no comment on religious issues since becoming premier. He was himself accused of failing to curb 2002 anti-Muslim riots that claimed at least 1,000 lives when he was chief minister of Gujarat. He has always rejected the accusations and India’s Supreme Court found no evidence to prosecute him.