)
The chances of higher foreign direct investment (FDI) limit in the insurance sector have brightened with the UPA government considering a renewed bid to get Parliament's assent in the monsoon session, due to begin next month.
Two allies - one new, one old - will help the government. The Janata Dal (United), or JD(U), with 17 MPs (three are suspended from the party) has parted ways with the Bharatiya Janata Party (BJP) and will try to prove its political distance from its former partner.
The Dravida Munnetra Kazhagam (DMK) with 18 MPs had walked out of the Congress-led UPA, but Congress assistance in the recent election of Kanimozhi to the Rajya Sabha will not go unacknowledged, top DMK leaders have told the Congress.
Kanimozhi, the daughter of DMK supremo M Karunanidhi, could not have won the election without Congress support.
This solid phalanx of 35 MPs, coupled with the Samajwadi Party (22 MPs) and the Bahujan Samaj Party (21 MPs) whose letters of support to the UPA continue to be lodged in the safe custody of the President of India, means the government can technically clear the Insurance Bill in the Lok Sabha.
The Bill needs assent of 272 MPs in the Lok Sabha. With 204 of its own and the assurance that nearly 100 other MPs will support, the Congress says it is more confident now that the Bill has a chance of being passed. Its passage would pave the way for higher FDI in the insurance as well as the pensions sector. Liberalisation in the two sectors are linked to each other.
The BJP is opposed to both. "Our thinking is clear. There should be a standard 26 per cent FDI limit for the financial sector. If the government brings any Bill proposing to raise the limit to 49 per cent, we will not support it," said a BJP leader.
This assessment is based on meagre FDI flows in the sector even after FDI limits were liberalised. Although the Standing Committee on Finance, headed by BJP leader Yashwant Sinha, said the FDI limit should not be raised, this was not accepted by the government while finalising the Bill. Later, the Cabinet itself could not take a view on the Bill and it was deferred.
Clearing the Insurance Bill will be a big feather in the government's cap, given that it has been pending for five years. For the moment, however, managers are just testing the waters.
On the other hand, the food security Bill, which will provide cheap foodgrain to 67 per cent of Indian population is likely to be cleared by the Cabinet on Thursday and promulgated as an ordinance because the government is not sure if the Opposition will let Parliament function during the monsoon session.
Talking to Business Standard, Parliamentary Affairs Minister Kamal Nath said: "The government is safe. We have friends who are as opposed to the politics of the BJP as we are."
