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Former Finance Minister Yashwant Sinha said on Tuesday no agreement had been reached between his party and the United Progressive Alliance (UPA) government on supporting a Bill to raise the foreign direct investment (FDI) limit in the insurance sector to 49 per cent.
Earlier Bharatiya Janata Party (BJP) sources had told Business Standard the matter had been discussed internally and subject to certain conditions, their party was ready to help in liberalising this sector.
On Tuesday, however, Sinha told reporters the BJP stuck to its earlier stated view, that the government should abide by the 26 per cent FDI cap as suggested by Parliament’s standing committee on finance (which he heads).
Sinha said the party had told Finance Minister P Chidambaram he should not bring the insurance Bill in this session of Parliament, as the opposition would not let it pass. "There are reports of a deal between the government and the BJP on passage of financial Bills. No such deal has taken place on such Bills. We are in no mood for any deal with this government," Sinha told reporters.
Chidambaram had met Sushma Swaraj, leader of the opposition in the Lok Sabha, and Arun Jaitely, her Rajya Sabha counterpart, with Sinha last week to try and get support for the insurance and pension Bills. "In the meeting, Chidambaram was clearly told there is no possibility of getting the insurance Bill passed in this session of Parliament. We don't want a deal with the government," Sinha said.
Sinha did not deny the second part of the ‘deal’ — he said the BJP was ready to support the Pension Fund Regulatory and Development Authority Bill, claiming it was the same as drafted by the erstwhile NDA government. "This government has kept that pensions Bill hanging since 2004. We have suggested two amendments to this Bill, to which the government has agreed," Sinha said.
The BJP has suggested the FDI cap of 26 per cent be a part of the pensions Bill. Second, assured returns to subscribers should be stated.
Although the UPA has a majority in the Lok Sabha and the Rajya Sabha, after the tacit support of the Dravida Munnetra Kazhagam and the divorce between the Janata Dal (United) and the BJP, it remains to be seen if it will be brave enough to bring major financial legislation like the insurance bill for passage in this session. Chidambaram has indicated the Bill will be tabled.
