The Narendra Modi government is engaged in hectic efforts to secure enough support for its Insurance Bill to push it through Parliament in the current session. It is seen as the two-month-old government's first big reform as it attempts to boost a sluggish economy
Here are the latest developments
The Insurance Laws (Amendment) Bill aims at raising the ceiling on foreign direct investment (FDI) in insurance to 49 per cent from the current 26 per cent limit.
The BJP-led NDA government proposes this will be a composite cap - which means that foreign capital can flow in either as direct investment or via the portfolio route, or as a combination of both. So foreign investors can either directly buy equity from the company or can buy shares on the stock market up to 49 per cent.
To allay fears that Indian entities may lose control, the bill provides that management must remain with Indian companies.Also the approval of the Foreign Investment Promotion Board (FIPB) will be needed on any investment over 26 per cent.
Experts said a higher foreign direct investment limit in insurance could result in inflows of Rs 40,000 crore to Rs 60,000 crore over time, and immediate inflows of around Rs 20,000 crore.
The government's effort to push the Bill in the current session has come up against a phalanx of Opposition parties, including the Congress, which have jointly asked the Rajya Sabha chairman to refer the bill to an all-party parliamentary panel called the select committee for review.
That unity cracked today when the Biju Janata Dal changed its stance and supported the Bill. The Congress' partner in the UPA, Sharad Pawar's Nationalist Congress Party has come out in support of the Bill. The AIADMK is likely to support the bill.
The ruling NDA has a big majority in the Lok Sabha, but is in a minority in the Rajya Sabha. With eight vacancies the current strength of the Upper House is 242. So the BJP needs the support of 122 for the Bill to be passed.
The NDA has 64 MPs and has the assured support of BJD (7) and NCP (6); a total of 77. Those against the bill at the moment number 136.
The BJP says this is the "UPA Bill" with only 11 amendments that the present government has proposed. The Congress says it wants to assess "the ramifications" of those changes and so it must be reviewed by the select committee.
The government says most of the amendments were moved by the UPA and the latest changes are either in the title of the bill, of the year from 2013 to 2014, or the cap from 26 per cent to 49 per cent. The government's plan is to go for a vote on the bill and test the Congress - will the party that moved the bill in 2008 vote against it?
