Insurance and pension get FDI boost, need parliament nod
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The UPA government, as anticipated, approved a series of legislations Thursday to raise the cap on foreign investment in the insurance sector and allow FDI in pension funds, among others. But even as the latest decisions aimed to sustain the pace of reforms unleashed last month, the government pinned its hopes on adroit political management and its ability to secure the BJP's support for the moves to clear parliament.
"We will reach out to all political parties, especially the principal opposition party, to get the reforms bills passed," Finance Minister P Chidambaram told reporters after the cabinet gave its nod to raise FDI in insurance to 49 per cent from 26, and allow at least 26 per cent foreign investment in pension funds. The cabinet also cleared amendments to the Forward Contracts (Regulation) Amendment Bill, 2010, the Companies Bill and Competition Act.
The decisions follow the government's move last month to raise the price of diesel, limit LPG subsidies, allow FDI in multi-brand retail and open up the civil aviation sector to foreign airlines. Those decisions encountered stiff opposition from the Trinamool Congress and opposition parties and caused Mamata Banerjee to quit the UPA coalition.
While accepting that Thursday's bills would have to pass muster in parliament, Chidambaram maintained that he had no reason to feel the reforms measures would not be supported by other parties. "I don't think we should jump to conclusions at this stage. Now that the cabinet has passed the amendments to the legislations, we will be seeking support from all political parties, especially the principal opposition," he said. The bills are likely to be pushed for passage in the winter session of parliament.
"Obviously we need to sit and talk. After all, the process of making law is that of negotiation, discussion and finding consensus. I am hopeful that we will get support," he said. Chidambaram pointed out that a bulk of the recommendations by the standing committee on finance headed by the BJP's Yashwant Sinha had been accepted by the cabinet.