The Narendra Modi-led Government has introduced the Insurance Bill in the Lok Sabha, though a similar Bill is pending in the Rajya Sabha since 2008.
The Insurance Bill, among various things, intends to raise the foreign equity investment cap to 49 per cent from 26 per cent.
The Bill, once enacted, will replace the Insurance Ordinance, which was promulgated on December 24.
The Centre adopted the ordinance route, as it could not manage to get the pending Bill (in the Rajya Sabha) passed. Justifying the introduction of the Bill in the Lok Sabha, Minister of State for Finance, Jayant Sinha, said that the Government was well within its right to introduce the Bill which seeks to replace an ordinance.
“It is the Constitutional responsibility of the Government to ensure that the Bill is passed within six weeks of the Ordinance,” he said.
An ordinance works like a law, but needs to be replaced by legislation in the immediate next session.
However, Opposition members contended that the House has no legislative competence as a similar Bill is pending in the Rajya Sabha. An attempt to withdraw it from the Rajya Sabha last week was scuttled by the Opposition.
A Bill introduced in the Rajya Sabha never lapses. The Government will have no problem in getting the Bill passed in the Lok Sabha where it has a majority.
However, in the Rajya Sabha it is in minority. If the House rejects the Bill or keeps it pending for six months, then the Government could press for a joint session.