India to wield the axe on 287 'laughable' laws to attract investors

India is set to repeal 287 outdated laws, including one that bans flying kites without police permission, in an effort to make doing business in the country easier and attract investor to the South Asian sub-continent. -- PHOTO: AFP
India is set to repeal 287 outdated laws, including one that bans flying kites without police permission, in an effort to make doing business in the country easier and attract investor to the South Asian sub-continent. -- PHOTO: AFP

NEW DELHI (REUTERS) - If you happen to unearth treasure worth even as little as 10 rupees (S$0.21) in India, don't even think of pocketing it - that's because under a law introduced by the former British colonial rulers, it still belongs to "Her Majesty".

Now, however, the Treasure Trove Act of 1878 and nearly 300 other outdated laws are set to be repealed in the largest-ever cull of rules that make India one of the most puzzling places in the world to do business.

New Prime Minister Narendra Modi is hoping that less regulation and faster decision-making will lift India from its ranking of 134 out of 189 countries on the World Bank's ease of doing business table into the top 50 and attract investors.

"Some of the laws on our books are laughable. Others have no place in a modern and democratic India," said Law Minister Ravi Shankar Prasad who is leading the legislative clean-up.

Previous administrations have failed to remove obscure laws dating back to the 19th century, either because of objections by government departments or simply a lack of will. But Modi's officers have identified 287 obsolete laws for scrapping in a November session of parliament.

On the chopping block along with the Treasure Trove Act is an 1838 law that says property in an area of the former imperial capital of Calcutta can only be sold to the East India Company, which laid the foundations of the British Empire but ceased to exist more than 150 years ago.

An 1855 measure removing a certain tribe from the purview of local laws because it was an "uncivilised race" will also go.

Even after all these have been abolished, there will still be hundreds of clauses within other laws and thousands of regulations that are real obstacles to business. The government has started identifying these anomalies too, Prasad said.

Flying kites or balloons without police permission is illegal across India as they are classified as an "aircraft" under a 1934 act, and a World War II decree outlaws the dropping of pamphlets from the air in the state of Gujarat.

Under the Motor Vehicles Act, the state of Andhra Pradesh enacted a law that a motor inspector must have a clean set of teeth and anyone with a "pigeon chest, knock knees, flat foot, hammer toes and fractured limbs" will be disqualified.

"There are instances where the entire statute is dysfunctional," said prominent economist Bibek Debroy, who advised Modi during his election campaign and has written a book on the absurdities of Indian law.

He said that obscure laws can sometimes be abused.

A swanky New Delhi hotel was threatened with a lawsuit for refusing to give water to a person who invoked an 1867 act under which a rest house must offer passers-by free drinks of water.

Factory owners have suffered at the hands of government inspectors who insist on rules requiring spittoons to be kept in the premises as well as earthen pots for drinking water. Even if factories install modern fire extinguishers, they must still have red-painted buckets with water and sand to put out a blaze.

Some have a found a way around absurd regulations.

A Post Office Act of 1898 stipulates that only the government has the right of "conveying by post, from one place to another" most letters, so courier companies get around this by calling the letters they send "documents".