Four Opposition parties on Tuesday filed dissent notes in the Rajya Sabha Select Committee on its draft report on the Insurance Amendment Bill which proposes among other things an increase in FDI cap from 26 to 49 per cent. The report, which is approved by a majority of 15 members on the panel, will be tabled in the House on Wednesday.
P. Rajeev (CPI-M), Ramgopal Yadav (Samajwadi Party) and K.C. Tyagi (Janata Dal-United) filed a joint dissent note “rejecting” the draft report. Noting that the government had submitted in the Select panel the same views that had not been approved by the Standing Committee on Finance, the three parties “rejected” the draft report.
For political reasons, Derek O’Brien (Trinamool Congress) filed a separate dissent note. However, BJP allies and other Opposition parties, including the Congress, approved the draft report. The parties were given time till Tuesday to file their objections on the draft.
While not filing any dissent note, the Bahujan Samaj Party took the stand that it will move amendments on the floor of the House when the amended Bill comes up for consideration and passage.
All the dissenting parties were unanimous in opposing Clause 3 of the Insurance (Amendment) Bill, 2008 which seeks to raise the foreign equity investment cap while also allowing for portfolio investments.
The CPI-M, SP and JD (U) also opposed the entry of foreign re-insurers and insurance syndicates like Llyods of London, which they said will amount to permitting 100 per cent FDI. They quoted the objections raised by the General Insurance Company in this regard in their dissent note.
The TMC’s dissent note said, “Higher FDI cap will only result in Indian entities liquidating their stake, at several times their original investment, without any fresh investments coming in. The Bill creates no safeguards to ensure that the additional capital will be used to improve insurance penetration in rural areas.”
The party said “portfolio investments can be liquidated and repatriated very quickly. They can cause serious instability in the economy. Along with foreign capital, the country was likely to import practices that could cause serious loss to the Indian middle classes by inviting them to invest in high-risk plans.”
