The Prime Minister met this morning with his senior-most ministers at his office at Parliament to discuss how to push through a major reform that would allow billions of dollars to flow into the insurance sector which is starved of funds and held back by over-regulation.
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The government has been blocked so far in its attempt to introduce the Insurance Bill in the Rajya Sabha, where it has about 60 representatives in the 250-member house. So it cannot get the proposal approved without the support of some Opposition parties.
The Congress is leading a team of 11 parties that say the Insurance Bill, which increases foreign participation in an insurance venture to 49 per cent from 26 per cent, must be reviewed in detail by a parliamentary committee.
That would defer the proposal by several months, and impede the government's plans to deliver on an array of reforms to revive economic growth which last year fell to 4.7 per cent, the slowest pace in a decade.
On Monday, the government asked the Congress to detail its objections to the Bill and share them by today. Plans for Finance Minister Arun Jaitley to meet with the heads of political parties to build consensus were abandoned. The government says it will wait for the Congress to share its feedback.
Other parties opposed to the Bill include the Left and Mamata Banerjee's Trinamool Congress. However, a traditional Congress ally, Sharad Pawar's NCP, has decided to support the Insurance Bill, so the Congress has submitted a new notice that asks for the Bill to be referred to a parliamentary committee.
The Congress, which has 69 Rajya Sabha members, is expected to submit its notice in the Upper House when the government moves the Bill, but that is not listed on today's agenda for the Rajya Sabha.
The government is hoping to win the support of the AIADMK, which has about 10 Rajya Sabha members. The regional party is headed by Tamil Nadu Chief Minister J Jayalalithaa. Sources say that in exchange for her support, the government is hinting it could give the post of Deputy Speaker in the Lok Sabha to her party.
Getting the Insurance Bill approved in the Lower House or Lok Sabha poses no challenge, where the BJP and its partners have a huge majority.
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.
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. The Bharat Mazdoor Sangh, a huge right-wing trade organization backed by the BJP's ideological mentor, the Rashtriya Swayamsewak Sangh or RSS, has warned of national protests if the Bill is cleared.
