HOW DOES A BILL BECOME A LAW - THE INDIAN WAY
By Ruma Dubey
The market finally had some reasons to celebrate. The Fed Reserve’s statement change from “considerable time” to “patience” and then the Cabinet clearing Goods and Services Tax (GST) was all that it needed. Looking at it logically, none of the two were “unknowns” or unexpected but the market was probably relieved that nothing unexpected did happen. It’s nice to see a green market as it brings along with it happy faces and cheer. Red, as a color is very vibrant but on Dalal Street, it spreads an expression of melancholy , people with sullen moods and faces.
GST getting the Cabinet nod was a great thing to happen but really, did we expect anyone to oppose in the Cabinet – that was just a formality to be undertaken. And ditto for the Insurance Bill, which got the Cabinet nod last week and it was expected that it would face road blocks in Rajya Sabha. The news now doing the rounds is that it may take the ‘Ordinance route’ to get the Insurance Bill passed.
And what about GST? That is where the real test begins – when it goes to the Parliament. So before we celebrate too much over this Cabinet nod, let us get a reality check about how much time before this “nod” actually becomes a law or act. There are quite a few steps which need to be completed before a Bill becomes an Act of Parliament.
1: The Bill is introduced in either House – Rajya Sabha or Lok Sabha. Here, naturally, given the strength in the Lok Sabha, it might first get introduced there.
2: It is introduced by a Minister and that is known in Parliamentary parlance as “First Reading” of the Bill and this is done on a pre-scheduled date. In this ‘reading’, he reads only the title of the Bill and that in a sense, marks the introduction. The Bill at this stage is not debated & discussed.
3: The Bill is published by the Gazette of India and copies are distributed amongst the members of the House. Most bills are first published even before introduction.
4: Then the mover of the Bill puts a resolution that the Bill be sent to a Select/Standing Committee. Here, the Committee will consider the general principles and clauses, they also take expert opinions and after all this, the Committee submits its report to the House. This report is looked upon as an advice by the Committee.
5: Once the report comes in, a date is fixed for discussing it. The House discusses the Bill, which in many cases, is all about a walk-out or unruly scenes, which puts this process into a logjam. Once the report does get discussed, clause by clause and item by item, amendments are suggested. The clauses which need more support and the amendments suggested is put to the House for voting. And based on the majority votes, the Bill is passed. This is known as the ‘second reading.’
6: Then comes the ‘third reading’ which is the last stage of the Bill. Once again a date is fixed for this reading. There is nothing much which gets discussed at this stage and chances of rejection here are minimal. At this stage, the entire Bill is put to vote – it could get either rejected or passed.
7: Now the Bill has cleared the first House, it now goes to the other House. Here too, it passes through all the stages it passed through in the first House, except for the introductory stage.
8: Once the Bill is passed by both the Houses, then its smooth sailing but if one House differs from the other, then a joint meeting of the two Houses is called. Then the Bill is placed before them for voting. At this stage, because the Lok Sabha’s strength is more than that of the Rajya Sabha, the wishes of the Lok Sabha obviously decided the fate.
9: On passing through both the Houses, the Bill is sent to the President for his approval. Usually, he approves it, which explains why there was so much lobbying to get the ‘right’ man for the job of a President.
10: On getting the President’s nod, the Bill finally becomes an Act and is published in the Govt gazette. Whew!
So how long does this all take? There is really not ‘fixed’ time frame – it could get passed in days or could be stuck for years. Like the Finance Bill or the Budget is introduced on 28th Feb and it becomes a law effective from 1st April. If the Bill goes to the Committee, well, it could take much longer. And if the Parliament is not in session and the govt wants to still go-ahead and make it into a law, it passes an Ordinance. This is like a temporary law and within the next six months, it can be approved by the Parliament to make it a permanent law. It is widely expected that GST could come into effect by 1st April 2016.
Moral of the story of today – its great if the Cabinet clears the Bill but it is still pretty far away from becoming a law.