Opposition wants fresh scrutiny of Insurance Bill

A hike in the limit on foreign investment in insurance companies will have to wait, with the Opposition demanding that the Narendra Modi Government’s first major reform initiative, the Insurance Laws (Amendment) Bill, be scrutinised by a parliamentary panel.

Over 10 years in the making, the Bill, which was to be introduced in the Rajya Sabha on Thursday, saw the Opposition raising concerns over some of the official amendments moved by Finance Minister Arun Jaitley.

In all, there are 97 amendments to the original Bill, which, according to the Opposition, has changed the structure of the proposed legislation.

The main contention is over the eighth amendment (increasing the FDI limit to 49 per cent). It stipulates that the limit will be a composite cap, and that foreign capital could be brought in either through direct investments or portfolio investments or a combination of both.

The Bill says direct investment refers to foreign investors buying equity directly from an Indian company and getting representation on the board of directors or becoming part of the management.

“It (foreign investment) should be through FDI. The new Government has changed the essence of the law,” said a senior Congress MP, adding that the Congress would move a motion to form a select committee on the issue.

Though the Government would like to pass the Bill without any delay and take it up for discussion in the Rajya Sabha on Monday, the Opposition may not agree. The Government is in a minority in the Upper House.

The Government, however, hopes that the confusion within the Congress over the Bill will help it to cross the bridge in the Rajya Sabha.

While a section of the Congress, including former Finance Minister P Chidambaram, welcomed the Bill, the Rajya Sabha Opposition leader Ghulam Nabi Azad wants the Bill to pass fresh scrutiny by a select committee.

CPI (M) Deputy Leader P Rajeeve argued that ‘amendments’ to ‘official amendments’ cannot be moved. The original Bill was to amend the existing insurance law. It was scrutinised by the Standing Committee of Finance.

“The Government should either withdraw the present Bill and bring in a new one or send it to a select committee for fresh scrutiny of the legislation and amendments moved by the Government,” he told BusinessLine .