Legislation - piecemeal

Govt notifies just parts of various regulatory laws

Most people assume that the Bills passed by Parliament become the law of the land. In recent times, however, the government has taken to notifying only selected parts of Bills passed, and then signed into law by the President. Take the Competition Act. Though passed in 2002, it was only in March this year that the government appointed the Competition Commission’s members and chairman. And even now, the government has not notified Sections 5 and 6 of the Act, which deal with the regulation of mergers and acquisitions. Ironically, Section 1(3) of the Act allows for this possibility and says different provisions of the Act will come into force from the day they are notified. It is true that businesses have come out against the Act providing a maximum of 210 days for the Commission to give its verdict on M&As. But if the Commission does not get to rule on such issues, how is it to work? In the airline business, for instance, a host of airlines (eg Air India and Indian Airlines) have merged or come under common ownership, without the Commission examining their impact on customers. If the government agrees with what business lobbies say, why not go back to Parliament and amend the law?

In the case of the Petroleum and Natural Gas Regulatory Board, the government took 18 months to notify the Board after the Act was passed in 2006. In this period, the government gave clearances to nine pipelines — five belonging to Gail and the others to Reliance Industries. One could argue that, after a standoff between the PNGRB and the government, these pipelines are going to be regulated by PNGRB, so there’s no problem—but that is not the case. For one, if PNGRB were to clear these pipelines, it would have insisted on bidding to decide who would construct the pipelines. Second, it would have been able to lay down rules to keep a check on prices. Today, when these pipelines are brought to PNGRB for fixing tariffs, how is it to know if costs have not been inflated? The government has also refused to notify Section 16 of the PNGRB Act — the PNGRB Act also has the same provisos as the competition law, which allows different parts to be notified on different dates. This ensures that while pipelines approved by the central government before PNGRB came into existence don’t need the latter’s clearance, those approved by state governments do. Similarly, while the Act envisages that prices of various petroleum products will be regulated by PNGRB, the government has not notified any petroleum product which PNGRB can monitor!