The Lok Sabha on Wednesday passed the long-pending insurance bill that proposes to raise the foreign direct investment (FDI) ceiling in the sector to 49% from 26%, a key economic reform that the government said was crucial for improving insurance penetration in the country.
The challenge for the government now is to get the bill – that seeks to replace an ordinance – passed in the Rajya Sabha where the BJP-led National Democratic Alliance (NDA) is in a minority.
The Congress and Left parties opposed the legislation in the Lok Sabha, indicating what the Modi government can expect in the upper House.
The Congress supports higher foreign investment in the insurance sector but does not favour inclusion of Foreign Institutional Investor (FII) financing in the overall 49% FDI cap.
Party sources said the Opposition will not allow the government a “smooth run” in the Rajya Sabha. “They still have to cross many hurdles,” a Congress leader said.
If the bill is defeated in the upper House, the government might call a joint session of Parliament where it will have the numbers to get it ratified.
The Congress, Left and Trinamool Congress protested the introduction of the bill in the Lok Sabha, saying the House had no “legislative competence” as a similar bill is pending in the Rajya Sabha since 2008.
Congress MP Shashi Tharoor said the government violated Article 107 of the Constitution with this move. “This shows that NDA is a name-changing rather than a game-changing government,” he said.
A united Opposition scuttled the government’s attempt to withdraw the old bill from the Rajya Sabha last week.
The Lok Sabha also passed the coal mines bill to allow e-auction of coal blocks, amid opposition from the Left and other parties.
The bill aims to replace two ordinances issued by the government last year, after the Supreme Court cancelled the allocation of 204 blocks.
Coal and power minister Piyush Goyal said the legislation would ensure a transparent and honest process of coal block auctioning.