Courtesy: The Globe and Mail Indian Prime Minister Narasimha Rao recently got a short, sharp lesson in the limits of power.
He wanted the Rajya Sabha, the upper house of parliament, to support a change in the law so India could ratify its membership of the World Trade Organization.
Rao, whose party has only 91 of the ‘240sscatsin the Rajya Sabha, struggled to persuade minor parties to support a bill to amend the Patents Act that would have changed India’s laws on intellectual property rights in keeping with WTO rules, He failed and withdrew the bill.
The WTO will give India some time to conform. But if the Rajya Sabha remains adamant, India’s membership of WTO will be at risk and so will investor confidence.
India’s opposition parties are happy with tough rules on copyright (India is a major exporter of software and films), but they oppose changes in laws on patents and plant variety protection,
India’s existing laws give patents only for processes, not products, and drug patents last for only seven years, So Indian companies have been able to make drugs still on patent internationally and to sell them at a tenth of the price or less. WTO rules will stop this and mean higher drug prices, Seeds will also become costlier, because of stricter plant variety protection. The fiasco in the Rajya Sabha drives home the lesson that India is, form any purposes, in an era of coalition politics, All legislation except the budget needs approval of both houses of parliament, The Rajya Sabha is elected by members of state assemblies, and Rao has recently suffered major re~ verses in assembly elections in Maharashtra, Gujarat, Karnataka and Andhra Pradesh, A third of the members of the Rajya Sabha retire every two years and fresh elections are held to fill their place, When this happens, Rao’s strength in the Rajya Sabha will decline further.
The prime minister has exasperated many observers by refusing to reform some parts of the economy while changing others radically, His weakness in the Rajya Sabha in part accounts for this failure. He has been radical in abolishing most industrial and import licensing, since that does not require fresh legislation. Changes in India’s rigid labor rules would, however, need legislation. Rao has prevailed on other parties to pass laws promoted by the government, but he conserves his political capital carefully. In the case of the Patents Act, Rao will need to use all the resources at his command, and may fall even then. A general election is due next year and opposition, parties will seek every opportunity to embarrass him.
Indeed, it is conceivable that a coalition of parties excluding Rao’s Congress party will from the next government. That, paradoxically, may be the best way of ensuring that the Patents Act is amended. The people who bark loudest in opposition often wag their tails when they come to power.
Article extracted from this publication >> May 12, 1995
