The United Progressive Alliance (UPA) government expressed confidence on Thursday that it would be able to get the contentious Insurance Laws (Amendment) Bill, 2008 and the Pension Fund Regulatory and Development Authority Bill, 2011, pushed through in Parliament. This was even though the numbers, especially in the Rajya Sabha, are stacked against it — and a host of parties, including old ally Trinamool Congress, current friend Samajwadi Party and the Left Parties immediately denounced the government’s latest efforts to fast-forward the reforms process.
Shortly after the Union Cabinet cleared amendments to these bills, sending out a strong message to the markets and foreign investors, Finance Minister P. Chidambaram told journalists that he was “optimistic that all sections of the House, especially the principal Opposition,” would help enact the two laws. The government, he stressed, had taken note of the fact that the Bharatiya Janata Party (BJP), which had opposed foreign direct investment (FDI) in multi-brand retail, had said that it did not object to FDI in other areas. The BJP has 114 MPs in the Lok Sabha and 49 in the Rajya Sabha.
Not misplaced
The government’s optimism is apparently not misplaced. In sharp contrast to the Left Parties’ strident opposition to the Cabinet decisions on insurance and pension funds, the BJP responded very carefully on Thursday. “The announcements made by Mr. Chidambaram along with the caveats need to be studied closely,” BJP chief spokesperson Ravi Shankar Prasad said, adding, “All these are important issues whose fine print needs to be examined.”
The BJP’s caution is understandable as its stated position is that it is not opposed to FDI per se . Indeed, even though the party’s opposition to FDI in multi-brand retail dominated its recent national executive meeting at Surajkund, senior party leaders there were anxious to send out a message that the BJP was not entirely opposed to FDI.
On Thursday, again, BJP spokesperson Prakash Javadekar stressed that his party was not opposed to more FDI in insurance and pension, provided certain caveats and conditions were met to “safeguard the interests of the people.” Pointing out that the Parliamentary Standing Committee on Finance, headed by senior BJP leader Yashwant Sinha, had recommended 26 per cent FDI in the insurance sector, he recalled an interesting detail from the past: “Sinha was the first one to propose 49 per cent FDI in insurance 10 years ago. That time, the Congress had opposed it and since we wanted a consensus, we agreed to 26 per cent.”
On Thursday, of course, the government favoured 49 per cent FDI in insurance on the basis of a recommendation made by the Insurance Regulatory Development Authority, but Mr. Chidamabaram said he hoped that the government would be able to persuade the Opposition to accept this figure, once the negotiations got under way.
Tough road ahead
The government is aware of the difficulties ahead, as Mr. Chidambaram made clear when he said that since the government “does not have an absolute majority” in Parliament, only a “process of discussion and negotiations” could lead to a “consensus.” He, however, stressed, “Don’t start with the premise that it cannot be done,” while saying that it would not be possible to give a timeframe for the possible passage of the two bills.
Meanwhile, the Left parties flayed the government for pursuing ‘anti-people’ policies and vowed to continue their fight to defeat these policy measures when they are brought in Parliament, even as the Trinamool Congress urged other UPA allies to quit the government.
Interestingly, on Thursday, for a variety of reasons, none of the Ministers belonging to the allied parties was present: the Dravida Munnetra Kazhagam’s M.K. Alagiri was away in Mumbai, the National Conference’s Farooq Abdullah in Srinagar, while the Nationalist Congress Party’s Sharad Pawar and Praful Patel, too, were out of town. When this was pointed out to Mr. Chidambaram, he just said: “The Cabinet is the Cabinet.”
