Parliament on Thursday paved the way for 49% foreign investment in the insurance sector as Rajya Sabha passed the Insurance Laws (Amendment) Bill, 2015 — the NDA government’s first major success in its bid to usher in big-bang economic reforms.
The bill, stuck in Parliament for seven years, finally saw the BJP and the Congress, which is the main opposition party in the upper House with 67 members, coming together to support it. It will replace an ordinance that was promulgated last December.
Apart from the Congress, the bill that was passed by voice vote was supported by opposition parties like AIADMK, BJD and NCP besides NDA allies Shiv Sena and Shiromani Akali Dal.
Left MPs — who stayed back and voted against the bill — also moved an amendment but it was defeated with 84 of the 95 members present rejecting it.
The SP, BSP, JD(U), Trinamool Congress and DMK staged a walkout just before the bill was put to vote.
Moving the bill for passage, minister of state for finance Jayant Sinha said raising the FDI cap would not only bring successful and large insurance companies to the Indian market but would also be vital for infrastructure development. “This is because there is a regulation that 15% of the premium paid for insurance will go into infrastructure development. So citizens will get the benefit twice… they will get insurance and infrastructure,” he said.
Assuring members that the premium paid would not leave the country, he said “the bill has enough provisions to ensure this”, adding that it would, in fact, help domestic companies — including Life Insurance Corporation — to compete globally.
“When Kohli and Tendulkar can compete around the world, why can't LIC compete with companies from countries like Indonesia and Turkey,” he asked.
Earlier, the Trinamool’s Derek’O Brien said it was ironic that a bill piloted by Jayant sinha was once opposed by his father, senior BJP leader Yashwant Sinha. The SP’s Ram Gopal Yadav and BSP leader Satish Chandra Mishra opposed the bill, expressing fear that foreign companies would look only for profit and not do much to benefit the common man.