India passes bill to raise FDI cap in insurance sector

Wednesday 25th March 2015 05:58 EDT

Seven years after it was first introduced by the UPA, a bill seeking to raise FDI cap in insurance sector from 26% to 49% was finally approved by Indian Parliament with the consideration of the Upper House. The NDA government had issued an ordinance last year to implement the bill which had been lying in cold storage after it was referred to a Rajya Sabha select committee in the face of stiff opposition then by ironically the BJP-led opposition.

The Insurance Laws (Amendment) Bill, 2015 will replace the ordinance promulgated by the government last year. The passage of the bill in the Rajya Sabha, with help from Congress, comes as a major relief to the Modi government which had come under fire for the high-handedness with which it had taken the ordinance route to carry out major policy decisions.

The bill was passed through a voice vote after a three-hour debate which saw Left members repeatedly clashing with treasury benches. The Left parties, which had consistently opposed the bill since it was introduced in 2008, insisted that amendments they had moved be put to electronic voting. They said they did not want the bill to go through without registering a protest but the amendments were overwhelmingly negated in the voting.

Despite their opposition to the bill, regional heavyweights - SP, BSP and JD(U)-staged a walkout making it more convenient for the government. Apart from Congress, the Modi government received the backing of AIADMK, the Nationalist Congress Party, Biju Janata Dal besides allies Shiv Sena and Akali Dal.

DMK and Trinamool Congress, whose member Derek O'Brien accused the Congress of acting hand-in-glove with the BJP, also walked out before the voting. Participating in the heated debate, O'Brien tore into the government as he recalled how BJP was initially opposed to the idea behind the bill with its senior functionary Yashwant Sinha, father of MoS finance Jayant Sinha who moved the bill in the Upper House, then saying that one of the reasons why India had averted the 2008 financial crisis was the fact that it had not raised FDI cap.

The House had to be adjourned twice earlier as SP, Left and BSP members insisted that the bill could not be introduced in the Rajya Sabha as a similar bill introduced in 2008 was still pending with the House select committee.

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