 "All you need to know about the Insurance Bill: A primer")
First proposed in 2008, the Insurance Laws (Amendments) Bill envisages a 49 per cent foreign investment (composite cap including FDI or FII or a combination of both) in the cash-strapped sector. The insurance sector needs around $12 billion in capital by 2020.
Increasing the foreign investment cap to 49 per cent is expected to bring foreign investments of $3 billion immediately, most of it in life insurance sector.
A triumphant NDA government was ready to score its first major reform victory when the bill came up for discussion in the Rajya Sabha in the last Parliamentary session. However, about nine political parties, including the Congress, Samajwadi Party, BSP, and TMC, among others, opposed any potential passage and asked for the bill to be sent to a select committee.
Meanwhile, Prime Minister Narendra Modi and his cabinet have a lot riding on the passage of the bill in the winter session. While there are other big bang reform bills which are expected to be brought in the winter session, including constitutional amendments to the Goods and Service Tax, and amendments to the Land Acquisition Act, it is becoming clear that Insurance Bill is the one which the government wants to be passed. This is the one bill for which Finance Minister (and chief trouble shooter) Arun Jaitley and other ministers adept at floor management are willing to reach across the aisle more than ever.
The select committee has asked for more time and will now submit its report on December 12. The Modi government is determined to see the bill through and may concede to the many demands which the opposition is likely to make. While Congress and BJP are said to be on the same page, parties like SP, BSP and Trinamool are expected to try and throw a spanner in the works. How the government manages their demands will go a long way in determining if Modi can burnish his credentials as a reformer or not.
Increasing the foreign investment cap to 49 per cent is expected to bring foreign investments of $3 billion immediately, most of it in life insurance sector.
A triumphant NDA government was ready to score its first major reform victory when the bill came up for discussion in the Rajya Sabha in the last Parliamentary session. However, about nine political parties, including the Congress, Samajwadi Party, BSP, and TMC, among others, opposed any potential passage and asked for the bill to be sent to a select committee.
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The 15-member select committee, let by BJP MP Chandan Mitra, met various stakeholders and promised to submit its report by the third week of November. Some of the various issues it is looking at include whether the 49% cap should only be for long-term foreign investment (FDI) or should it be a composite cap for FDI and FII combined.
Meanwhile, Prime Minister Narendra Modi and his cabinet have a lot riding on the passage of the bill in the winter session. While there are other big bang reform bills which are expected to be brought in the winter session, including constitutional amendments to the Goods and Service Tax, and amendments to the Land Acquisition Act, it is becoming clear that Insurance Bill is the one which the government wants to be passed. This is the one bill for which Finance Minister (and chief trouble shooter) Arun Jaitley and other ministers adept at floor management are willing to reach across the aisle more than ever.
The select committee has asked for more time and will now submit its report on December 12. The Modi government is determined to see the bill through and may concede to the many demands which the opposition is likely to make. While Congress and BJP are said to be on the same page, parties like SP, BSP and Trinamool are expected to try and throw a spanner in the works. How the government manages their demands will go a long way in determining if Modi can burnish his credentials as a reformer or not.