The Narendra Modi government on Wednesday pushed through insurance and coal sector reforms by promulgating two ordinances. The ordinances, approved by the Cabinet in the morning, will allow the e-auction of coal mines and increase the FDI cap in insurance firms to 49 per cent.
The process for auctioning the first set of 24 coal mines will begin on Thursday, Coal Secretary Anil Swarup said.
Speaking to reporters after the Cabinet meeting, Union Finance Minister Arun Jaitley said “Now it (the increased cap in insurance) has the force of law.” The Standing Committee in Parliament had approved the Bill after which a Rajya Sabha select committee approved it for passage with “some modifications.”
The Cabinet had earlier this month cleared a proposal to raise the FDI cap in insurance. The Insurance Laws (Amendment) Bill, 2008, that had been listed in the legislative business of the Rajya Sabha was not passed due to frequent disruptions, frustrating the government’s efforts to turn it into law.
The move to raise the FDI cap is expected to inject between six and eight billion U.S. dollars into the insurance sector. Article 123 of the Constitution provides for promulgation of ordinances by the President during recess of Parliament when “circumstances render it necessary.”
Asked about the urgency for the ordinance while the Bill is pending in Parliament, Mr. Jaitley said: “Too much delay caused the urgency.”
