Thursday 24 July 2014

Union Cabinet clears insurance bill, Congress offers support - Times of India

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NEW DELHI: Congress on Thursday offered conditional support to the Modi government's plan to hike FDI limit in the insurance sector to 49%, brightening the prospects of the proposed legislation that has been in the pipeline for more than a decade.

Congress's guarded support that it could support the bill as long as it does not deviate from the proposal considered by UPA when it was in office could open the door for the legislation's passage in Rajya Sabha where NDA lacks the numbers.


On the day when the Union Cabinet cleared the insurance bill, Congress deputy leader in Rajya Sabha Anand Sharma said, "It was a UPA proposal and BJP had opposed it because of partisan politics. Now, we will have to see if the bill that the government brings is a departure from our draft or is in sync with it. If it is in sync, then we will be constructively engaged."


Sharma's careful remarks indicate a willingness in the Congress to support the bill as the party recognizes that it will be quite inconsistent to revise its support to a measure that it has backed whole-heartedly.


Indications from the finance ministry are that the Congress condition was likely to be met with the government proposing the bill as was moved by the UPA.


If BJP and Congress do agree on the insurance bill, it will end a long standing jinx that has often seen party considerations and individual equations stall the legislation at the last moment.


READ ALSO: ​Hike in FDI cap to 49% in insurance, pension may bring $7 billion inflows



In the previous Lok Sabha, BJP leader Yashwant Sinha — who headed the finance standing committee — stoutly opposed increasing the FDI cap. Sinha's poor equation with then FM P Chidambaram did not help matters.


Chidambaram did get the BJP and Sinha to drop their opposition to permitting 26 % FDI in pension funds, but insurance proved a tough nut to crack with the UPA finally running out of time and political will.


The Congress stance on the insurance bill is critical to the bill's fate because unlike in Lok Sabha, where the BJP and NDA have a strong majority, the ruling camp lacks the numbers in the upper House. Here, UPA's 78 MPs can be critical.



A positive move from Congress would be a big relief for BJP as it would not only secure the numbers to push the bill through but also obviate the need to indulge in tedious bargaining with smaller outfits like SP, BSP, AIADMK. The government will also not have to take recourse to drastic measures like calling a joint sitting of Parliament.


From the government's point of view, its bid to encourage investment will be better served if Parliament signals a wide consensus with BJP and Congress on the same side of the fence.


BJP has been wary of Congress owing to its own attitude to economic reforms during the decade of UPA rule. The party opposed virtually every major proposal, starting from insurance to banking to GST to even the Direct Tax Code. In the absence of support from BJP, Congress could not push through major legislations because of the veto of its own coalition partners like Trinamool Congress.


Underlining the lingering bitterness, Anand Sharma said, "The Cabinet decision exposes that BJP practised unprincipled politics for four years. It opposed the bill because of its intransigence despite the parliamentary standing committee having cleared it. It was partisan as the opposition. But the change of seat seems to have triggered a change of mind too."


The saffron worries are centred around the upper House where it lacks the numbers. Any failure to cobble the majority in Rajya Sabha would force the difficult option of calling the joint session of Parliament, a route that is rarely exercised by the governments.



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