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Rediff.com  » Business » Govt open to minor changes in Insurance Bill

Govt open to minor changes in Insurance Bill

August 05, 2014 12:26 IST

Finance Minister Arun Jaitley on Monday said the government was open to accommodating minor modifications to the Insurance Laws (Amendment) Bill, 2008, so that it could be passed in the current session of Parliament. He also said calling a joint session of Parliament was a real option if the Bill was defeated in one of the Houses.

After an all-party meeting failed to break the deadlock on the issue between the government and Opposition, Jaitley on Monday reached out to the Congress.

But the Congress continued to insist the Bill be sent to a select committee of Parliament, as it now was much changed from the one the United Progressive Alliance (UPA) government had tabled in the Rajya Sabha.

The party added it would be willing to support the legislation in the winter session of Parliament.

But the Finance Minister said the government was “extremely anxious that the insurance Bill, which has been pending since 2008, was finally cleared. In case they (Congress) want to make any minor modification, they should suggest that.”

At the brief all-party meeting in the morning, Jaitley told Opposition leaders, particularly the Congress ones, that the language and contents of the Bill were the same as that tabled by UPA; no major new amendments had been proposed. He said the changes suggested by Parliament’s standing committee on finance related to altering dates and numerals and were “inconsequential”.

He added the government was ready to consider changes suggested by the Congress right away.

The finance minister also said only three possibilities existed if the intent of the Opposition was to move forward.

First, the Congress approved the Bill in its present form, since it was UPA that had proposed increasing the foreign investment cap to 49 per cent.

“Alternatively, if UPA has changed its mind, it can participate in defeating the Bill; in that case, one House will approve it and the other will disapprove it,” he said. The third possibility was suggesting changes to the Bill.

Jaitley said the fourth possibility, it at all there was one, was to do nothing and keep the Bill hanging fire.

But, he added, the Congress could not interminably delay the Bill and that the government might consider calling a joint session of Parliament. A joint session was last called was by the Atal Bihari Vajpayee-led government to pass the Prevention of Terrorist Activities Act (Pota) in 2002.

Later in the afternoon, the Congress and other parties opposing the Bill accepted the government’s suggestion for another meeting, either on Tuesday or Wednesday, to discuss and resolve differences.

However, by evening it was back to square one, with Leader of Opposition in Rajya Sabha Ghulam Nabi Azad asking the government to refer the Bill to a select committee.

“We are totally in favour of foreign direct investment (FDI). It is our baby and it was the Bharatiya Janata Party (BJP) that was opposed to it in 2008. We were given to understand that our Bill was going to be passed in the House. But the present government has made some substantive amendments to the Bill.”

Azad said his party had recommended that the substantive issues like FDI, which had been diluted by foreign institutional investment (FII), along with other issues, should be discussed and examined dispassionately and objectively by the select committee.

“The Bill can be passed in the winter session and we will ensure its passage,” he said.

The Bill, which proposes to raise the foreign investment ceiling for insurance companies from 26 per cent to 49 per cent, was to be tabled in the Rajya Sabha on Monday, but the government postponed it and called an all-party meeting instead.

Nine parties, including the Congress, had written to Rajya Sabha Chairman M Hamid Ansari on Friday that the Bill be referred to a select committee, since it was no longer the ‘original’ Bill tabled in the Upper House.

BJP and the National Democratic Alliance (NDA) are in a minority in the Rajya Sabha and need the support of Opposition parties to push legislation.

On Monday, the Biju Janata Dal and Congress ally Nationalist Congress Party announced their support to the Bill.

Jaitley, Parliamentary Affairs Minister M Venkaiah Naidu and his junior minister Prakash Javadekar represented the government at Monday’s meeting. Jaitley and Naidu voiced concern over the grossly inadequate insurance coverage in India and said the sector needed sufficient capital flows.

BJP’s manifesto for the 2014 Lok Sabha elections had promised crop and nationwide health insurance.

Sources said Prime Minister Modi’s maiden Independence Day speech could touch upon his government’s commitment to these.

The passage of the Bill in the current session would enable Modi to showcase it during his visit to the US towards the end of September.

Naidu asked the Congress and other parties to list their recommendations on the Bill that could be discussed in the next couple of days.

He also said the government was ready for a detailed discussion in the Rajya Sabha.

Congress leader Anand Sharma said his party wanted clarity on the implications of the settled definition of foreign direct investment, given the composite nature of foreign investment proposed for the insurance sector in the Bill.

“We told them identify what are those implications you are concerned about and the government will address those.

They said they would discuss among themselves and again discuss with us. I am confident we will be able to evolve a broad consensus,” Naidu said.

He added the Left had a principled stand against FDI in any sector which the government understood, but the Congress and BJP were “on the same wavelength” on the issue.

BJP, on its part, had remained non-committal despite efforts at building support for the Bill by former finance minister P Chidambaram during UPA government years.

NCP’s Praful Patel said his party would support the Bill because it was part of the decision when UPA tabled it. Communist Party of India (Marxist) leader Sitaram Yechury said allowing FIIs access to the insurance sector meant risking the savings of millions of people.

He added the global financial meltdown started with an American insurance company.

The Congress has 69 MPs in the Rajya Sabha and BJP has 42.

Those opposing the Bill together have 133 MPs, while those in support are 68 in a House whose current strength is 242.

The treasury benches would either need 122 votes to pass the Bill or hope that some parties abstain.

ENSURING SAFE PASSAGE

* A first: The insurance Bill is the first major economic reform by the Modi govt
*Changes: The Bill, as approved by Cabinet on July 24, has 111 clauses; 97 amendments have been finalised
*Ceiling: The Bill aims to set the composite foreign equity cap in insurance at 49%
*Capital: Requirement for health insurance firms is Rs 50 cr (Rs 100 cr for general insurers)
*The fear: BJP fears that the Congress party might try to delay the Bill until Parliament’s winter session with the sole objective of embarrassing PM Modi during his US visit
*Politics vs cause: FM Arun Jaitley has asked the Congress not to play politics over the Bill

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