New Delhi:
Keen to deliver a major reform, the government is trying to persuade the heads of political parties to back more foreign investment in the insurance sector. But the Congress is adamant that the bill must be referred to a parliamentary committee. The government is desperate to avoid the Bill from being sent to a Parliamentary committee as it would mean a six-month delay.
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The Congress has reportedly prepared a fresh notice, removing ally Nationalist Congress Party or NCP from the list of parties which want the bill referred to an all-party select committee. It reportedly has the support of 10 parties like the Trinamool Congress, Communist Party of India-Marxist, Communist Party of India, Janata Dal United, Rashtriya Janata Dal, Samajwadi Party, Bahujan Samaj Party, National Congress, DMK and the Kerala Congress. The NCP is backing the government's bill. (Insurance Bill, Key to PM's Reform Push)
On Monday the government sought to introduce legislation in the Rajya Sabha permitting 49 per cent foreign participation in an insurance venture, up from 26 per cent, but it has been blocked by the Opposition.
The government has asked the Opposition to clearly list objections and is expected to continue its efforts to build consensus for the legislation which will allow billions of dollars to flow into a sector starved of funds and held back by over-regulation. ('No Double Standards by Congress on Insurance Bill' Says Rahul Gandhi)
India is the world's 10th biggest life insurance market - even though currently fewer than 4 per cent of Indians have insurance.
The Congress, which has 69 Rajya Sabha members, is expected to submit its notice in the Upper House when the government moves the Bill.
The BJP and its allies have about 60 members in the 250-member Rajya Sabha so the support of Opposition parties is essential. Getting the Insurance Bill approved in the Lok Sabha poses no challenge, where the BJP and its partners have a huge majority. (Insurance Bill in Parliament Deferred, Government Seeks Consensus)
The BJD which was earlier opposing the Bill has come out in support. To win over the 10 odd AIADMK MPs in Rajya Sabha, the government is also negotiating with the Tamil Nadu party. On offer is the post of deputy speaker in Lok Sabha.
India opened its insurance sector to private and foreign ownership in 2000 when the BJP led the union government. In 2008, UPA, anchored by the Congress, proposed changing ownership laws to allow 49 per cent foreign participation in insurance ventures, but it could not win Parliament approval.
Reforms in sectors like insurance and defence are key to the government's plans to re-energise the economy and revive growth that last year fell to 4.7 per cent, the slowest pace in a decade.
Thousands of employees at India's state-controlled insurance companies and Left parties are strongly opposed to foreign involvement in the insurance sector, saying it will give them control over domestic savings and is against national interest. Even the Bharat Mazdoor Saangh backed by the RSS, the BJP's ideological mentor, has declared nation wide protests the day the Bill is passed.
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