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Cong and BJP swap insurance roles

- Opposition refuses to play ball on bill, ‘anxious’ govt says open to minor modifications
Nehru: He convened the first joint session as an exemplary gesture to pass the anti-dowry bill, although the Congress enjoyed majority in both Houses

New Delhi, Aug. 4: The Congress is close to a decision to block the insurance bill in the Rajya Sabha for the time being and has gained enough support, raising the possibility of the first serious confrontation between the Narendra Modi government and a fractured Opposition.

An all-party meeting failed to reach a consensus today. Although the Centre wants to take the matter up again after two days — and prefers facing Opposition amendments to a delay — the numbers are stacked against it in the upper House.

The bill seeks to raise the foreign investment cap in insurance to 49 per cent from 26 per cent — about which the Congress does not have ideological differences with the BJP as it was the UPA that had moved the original bill in 2008.

However, treating the BJP to its own medicine, the Congress is now raising questions about the new government’s definition of foreign investment. When the UPA had moved the bill, the BJP had opposed it for one reason or the other — in fact, the party’s objections were at play as recently as early this year.

The government does have the option of convening a joint session of Parliament and passing the bill using its brute Lok Sabha majority. But opinion exists that a joint session can be called only if the bill is defeated in the Rajya Sabha as it had already been tabled in the House in 2008.

Vajpayee: Pota, the anti-terror bill, was defeated in the Rajya Sabha, following which the Vajpayee government called a joint session and passed it

The strategy the Opposition parties are working on with Congress support is to block the Insurance Laws (Amendment) Bill before it is taken up for discussion and passage.

Right at the introduction stage, they are likely to demand voting on a motion to send the bill to a select committee, derailing further movement.

Congress sources today dismissed the charge of an about-turn on a bill their own government had introduced, and also that of tit-for-tat obstructionism against the BJP whom they had, while in power, repeatedly accused of “political opportunism”.

They claimed they needed “clarity” on the “fundamental changes” the new government had made to the bill — a claim the BJP denies — especially to the definition of the key term “foreign direct investment”.

“We are for the legislation and raising the cap to 49 per cent in principle,” a senior Congress leader told The Telegraph. “But the changes made by the new government have to be studied.”

The fine print

A statement issued by parliamentary affairs minister M. Venkaiah Naidu after the all-party meeting denied the new government had made “major” changes to the bill.

“Congress leader Anand Sharma said his party wanted clarity on the implication of the proposed bill, inter alia (among other things), on the settled definition of ‘foreign direct investment’ given the composite nature of 49 per cent FDI proposed in the insurance sector,” the statement said.

“Finance minister Arun Jaitley in his response said the language and contents of the proposed bill were that of the UPA government only and no major new amendments were proposed.”

Asked what constituted a “fundamental change”, a Congress leader said: “The very definition of FDI is being changed, equating it with foreign institutional investments (FIIs) and portfolio investments.”

He added: “These will have wider ramifications — and what is the problem if a select committee having members from all parties studies these details?”

In the UPA’s version of the bill, only direct investments from abroad into an Indian venture were considered FDI or foreign direct investment. But foreign inflows also take place through institutional investments.

The Congress feels the NDA government means FPI (foreign portfolio investments) when it says FDI. FPI will include FDI as well as funds brought in by foreign institutional investors (FIIs).

Since the issue has become a political battle, the Congress is drawing a distinction between FPI and FDI. The Congress feels that keeping the term “FDI” pure would ensure that an investor with domain knowledge and interest in the field would invest in the Indian venture whereas some foreign institutional investors could exit after making quick gains on the stock markets.

Finance minister Jaitley said tonight that “the government is extremely anxious that the insurance bill, which has been pending since 2008, is finally cleared. In case they (Congress) want to make any minor modifications, they should suggest that.”

The Congress, the communist twins, Samajwadi Party, Bahujan Samaj Party, DMK, Janata Dal (United), Trinamul Congress and the Rashtriya Janata Dal have submitted a notice to the Rajya Sabha Chairman asking the bill be referred to a select committee.

But the NCP has broken ranks with the Congress, and the Biju Janata Dal too has offered support to the government. Still, the Opposition has the numbers to defeat the bill in the Rajya Sabha.

Payback time

The key issue, therefore, is whether the Congress will take a leaf out of the handbook for obstructionism that the BJP followed in Opposition, with a cost to the economy.

Some Congress leaders today recalled how the BJP had blocked the bills on goods and services tax, insurance law amendments and judicial accountability. They cited an old Modi tweet that had equated the proposed insurance reforms with selling the nation.

The party is split on its course of action. “We fought for reforms but the people have spoken in the general election, giving us 44 seats and the NDA, which blocked all legislation, 300-plus,” one leader said.

“We should introspect why we lost instead of becoming an active partner in the new government’s pro-corporate economic agenda.”

Seniors such as P. Chidambaram, however, believe the party must not act out of pique and hurt the economy.

Officially, the Congress remained non-committal. “The Congress wants all stakeholders appropriately consulted,” spokesperson Randeep Surjewala said.

“We are pro-investment but we are also for inclusive growth. If the interests of lakhs of people are going to be jeopardised, a proper examination and corrective steps are required.”

Asked if the Congress had changed its stance on the bill, Surjewala said: “We haven’t said a final ‘yes’ or ‘no’. We only want the bill examined by a select committee. The Congress will express the voice of the poor and the insurance workers. We want a balanced view and the matter is still under deliberation.”

Joint session

The bill is now the property of the Rajya Sabha. The government has the option of withdrawing the bill but that may entail voting in the Rajya Sabha, where the NDA is in a minority, and the Opposition is unlikely to help out.

A joint session would have been less bumpy had the bill not been tabled. In that case, it would have been easier for the government to table it in the Lok Sabha and immediately convene a joint session.

Although little prevents the government of the day from passing all bills through joint sessions as long as it enjoys a sizeable majority in either of the Houses, such a strategy would be considered a “constitutional oddity”.

The last law passed through a joint session was the anti-terror — and now defunct — Pota because the NDA was in the same boat in the Rajya Sabha then as it is now. The Pota legislation was defeated in the Rajya Sabha, following which a joint session was called in 2002 when the Atal Bihari Vajpayee government was in power. Tarred by charges of misuse, the law was repealed by the Manmohan Singh government in 2004.

But the first joint session was convened for a far nobler objective. The Jawaharlal Nehru government enjoyed majority in both Houses of Parliament but chose to pass the anti-dowry bill through a joint session to send a message of unanimity to the country.