Summer of 2020

Context: The recent reforms brought out during the just-concluded special session of Parliament are not just momentous but in many ways historic.

Labour Law Reforms: 

• Ending the tyranny of 'Inspector Raj': The web of 44 central labour laws, with over 1200 sections and provisions, has been dismantled
• Four simpler Labour Codes have been put in place: 

1. The Code on Wages
2. The Industrial Relations Code
3. The Social Security Code 
4. The Occupational Safety, Health, and Working Conditions Code. 

• They universalise minimum and timely payment of wages. 
• They enable ease of doing business by bringing in a regime of one-registration, one-licence and one-return.

Company Law Reforms: 

• Past Condition: Perverse provisions of Companies Act, 2013

• It criminalised even otherwise normal civil infractions of routine nature. 
• It completely paralysed risk-taking and quick decision-making among the private wealth creators.

• Post recent reforms: the perverse sections of the Companies Act 2013 have been done away with and nullifies the fear of criminal prosecution that hung over every corporate decision.

Banking Reforms

• Past Condition: No standard governance norms or binding regulations to protect customer interest.

• Organisations that called themselves "banks" were completely outside the ambit of RBI regulation.
• Indian mainstream banks had a practice of "grossing" their bilateral liabilities rather than "netting". These funds could otherwise have been available for lending to consumers and would have also helped lower interest rates.

• Post recent reforms

• The bilateral banking netting law has been passed: A large corpus of unproductive capital has been freed to be deployed in the market. 
• Cooperative banks will now be regulated by the RBI: customers will have the same protections as those of other regular banks. 

Agricultural Reforms: 

• Past Condition

• Treated as captive sources of producing cheap food grain while living at subsistence levels.
• At the farmer's end: no freedom to choose the point of sale for the produce, and also could not decide the price of the product with no say in selecting the buyer.
• At the consumer's end: short-changed with frequent cycles of persistently high inflation.
• The only beneficiaries of this perverse system were middlemen who thrived under political protection.

• Post recent reforms

• Farmers can now sell produce wherever they want, to whomsoever they want, and at whatever price they can command, the security of MSP still being there.
• The stifling nature of the Essential Commodities Act and the Agricultural Produce Market Committee (APMC) Act have both been neutered. 
• Contract farming is nationally enabled, allowing private investment to come in, which will bring in technology, modern equipment, better seeds, know-how for in-between-season crops, improved yields, better logistics, and freer access to national and international markets.