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The Narendra Modi government's reforms agenda might be well on track with support coming in from an unexpected quarter - the Congress.
The first meeting of the select committee looking into the contentious Insurance Amendment Bill took place on Tuesday, which saw the Trinamool Congress (TMC) walking out of the meeting.
The Left parties, Janata Dal (United), or JD(U), and two other Opposition members on the committee opposed raising the foreign direct investment (FDI) limit in the insurance sector from 26 per cent to 49 per cent. Select committee Chairman Chandan Mitra took up a clause-by-clause discussion of the Bill and the committee managed to discuss 48 out of 111 clauses.
The Congress, which was engaged in delaying tactics earlier, surprised many in the committee with its firm resolve to assist in submitting the report on time by December 12. The draft report is likely to be ready by December 8.
TMC's Derek O'Brien demanded more time to examine the Bill, which was overruled by the chairman. Both the Samajwadi Party (SP) and the Bahujan Samaj Party (BSP) abstained from the meeting on Tuesday.
The Communist Party of India (Marxist), or CPI(M), highlighted the "hidden dangers" of allowing private insurance companies to increase their FDI limit. The party is not convinced with the rationale that more FDI implies more insurance penetration and bolstered this argument with illustrations. It did not accept the argument that more capital would help raise more premium, citing the contrasting examples of Life Insurance Corporation of India and Bajaj Allianz. It argued that private insurance companies' track record of rejection of claims was far higher than that of LIC.
The only clause that the Congress wanted withdrawn was the one on foreign institutional investors (FIIs). However, the CPI(M) argued that explicitly including this FII clause could ensure that the foreign component was restricted to 49 per cent and not more.
The Opposition also demanded that the "Indian ownership and control" had to be clearly defined within the Bill so that there would be no room for interpretation by the executive. Given the numbers, the Bharatiya Janata Party (BJP) should not have too difficult a time in getting its say in the committee if the Congress with its three members is on its side. With one members each from Biju Janata Dal, Shiromani Akali Dal, and an independent supporting it, the government will have nothing to worry about. The TMC, CPI(M) and JD(U) are opposed to the Bill.
The All India Anna Dravida Munnetra Kazhagam, SP and BSP have as yet not clearly enunciated their position.
