Insurance Bill likely to be passed in current session of Parliament

Parliament building

New Delhi, Dec 9: The Bharatiya Janata Party (BJP) on Tuesday said that the Insurance Bill is likely to be passed in the current session of Parliament as the suggestions made by various parties have been incorporated.

Speaking to a news agency, BJP spokesperson GVL Narasimha Rao said: “It is heartening to know that the Insurance Bill which ought to have been passed in the last session is eventually likely to get passed in the house. Lot of suggestions from various parties have been incorporated, we hope that the bill will get maximum support in the House and gets passed.”

Rao further said: “The select committee has made its recommendations, the select committee’s report will be placed in Rajya Sabha and the bill will be taken up in the house.”

The Insurance Bill proposes to increase Foreign Direct Investment (FDI) limit in the insurance sector to 49 percent from the existing 26 percent.

Various parties, including the CPI (M), the Trinamool Congress, the JD (U), the RJD and the Samajwadi Party have earlier opposed the bill.

The Insurance Bill, which was heavily debated during the monsoon session of Parliament in August, was sent to a Select Committee of the Rajya Sabha, after the government was unable to garner the opposition’s support for it.

Currently, the select committee is understood to have favoured raising the existing 26 per cent cap on FDI in the sector to 49 per cent (including for portfolio investors).

The fear of ‘hot money’ or funds by foreign institutional investors taking over the sensitive insurance sector had first been voiced by the BJP (under the leadership of former finance minister Yashwant Sinha, the party had opposed raising the FDI caps altogether). Subsequently, the Congress had also voiced concern.

In August, Anand Sharma, Congress MP in the Rajya Sabha, had said, “FDI means it’s tangible investment, solid investment coming into a particular sector for business purposes and when there is a sectoral cap, the issue of ownership and control comes in, which means even if you go up to 49 per cent, the ownership and control is very clearly defined.”

“Earlier, there were two definitions. Now, too, one is for companies, and the other is under FDI so that there is clarity on what we mean by Indian ownership and control. The change that has happened is the BJP has proposed portfolio investment as part of FDI. This is a sensitive sector,” he had said.

(With Agency Inputs)

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