Financial sector reform is back on the agenda for the winter session of Parliament that starts on November 22 and ends December 20.
The Government has listed 25 Bills for consideration and passage for what promises to be a stormy session, with Trinamool Congress planning a no-confidence motion against the Government over the retail FDI issue.
The Bills the Government hopes to get passed include those on banking, insurance, pension and companies. The Bills were listed for the monsoon session, but could not be cleared as various scams dominated the session.
However, the Government is hopeful of getting the Bills passed this time around. “The Finance Ministry is consulting other political parties (to get required numbers),” Parliamentary Affairs Minister Kamal Nath told reporters.
The Government needs the support of the Bharatiya Janata Party (BJP) to get these key pieces of legislation through Parliament. Interestingly, the list does not include other politically sensitive Bills such as those on Land Reforms and Food Security.
Kamal Nath said these Bills had not been finalised. “The list is an indicative one and not exhaustive. As soon as these Bills are finalised, they will be brought before Parliament,” Nath added.
Foreign equity cap
The Insurance Bill proposes raising the foreign equity cap to 49 per cent from 26 per cent.
The Government has cleverly used the words ‘foreign equity cap’, which can mean a combination of foreign direct investment (FDI) and foreign institutional investment (FII).
Although the Standing Committee on Finance (led by BJP leader Yashwant Sinha) suggested keeping FDI cap at 26 per cent, the Government is hopeful of bringing the BJP on board.
Meanwhile, the Government incorporated the Standing Committee’s suggestion of minimum assured return and part premature withdrawal in the revised Pension Bill. This also proposes foreign investment ceiling in the pension sector at 26 per cent or such percentage as may be approved for the insurance sector, whichever is higher.
The third key financial legislation is the Banking Bill. The RBI has maintained that issuance of new banking licences depends on its passage. Once approved, this Bill will empower the RBI to inspect the books of subsidiary companies.