Insurance Bill, Key to PM's Reform Push: 10 Latest Developments

Over the past week, the government has twice 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. (Insurance Bill, Key to PM's Reform Push)

The government has asked the opposition to clearly list objections and is trying 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 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)

If the government continues to be stymied it has an option - rarely used - to hold a joint session of Parliament and deploy its huge majority in Lok Sabha to push through the Insurance Bill. But the BJP would rather get the Upper House on board. (Battle of the Whips as BJP, Congress Set Up Showdown Over Insurance Bill)

"We are going to bring the bill for discussion in this session," said Commerce and Industry Minister Nirmala Sitharaman, suggesting the government is prepared for a showdown over the reform.

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.

The Congress, which has 69 Rajya Sabha members, wants the bill to be sent to a parliamentary committee for review.

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.