Nine parties, including the Congress and the Left, are demanding that the Bill be first referred to a Select Committee.
Analysts have termed the Congress' move as curious as the party was the proponent of the Bill. It amounted to a role reversal as the BJP was reluctant to support the Bill in the UPA regime.
The Insurance Laws (Amendment) Bill, 2008 envisages, among other things, a hike in the composite foreign investment limit in the sector to 49%. Currently, foreign investment of up to 26% comprising FDI, FIIs/FPIs and NRIs is allowed in the sector through the automatic route.
In the Budget FY15, finance minister Arun Jaitley had proposed to hike the cap to 49% with full Indian management and via the FIPB route.
Official sources told FE that some parties are fine with allowing FDI up to 49% in the capital-starved sector but are wary about FIIs/FPIs having higher stakes. Another demand was that for the Bill to specify FIPB scrutiny of these
Sources said Opposition parties want the voting rights of foreign partners to be capped at 26%, irrespective of the higher foreign investment limit being planned.
A gradual opening up of the sector to 49% foreign investment, starting with non-life sector and then extending it later to the health insurance and life insurance, was also proposed.
In the 245-member Rajya Sabha, only 68 members back the Bill. This makes it crucial for the BJP to garner the support of the Congress in getting the bill through.
Select Committee, unlike a Standing Committee, is an ad hoc Parliamentary panel set up for a specific objective (in this case discussing the Insurance Bill) and is wound up after it completes its task and submits a report within a specified timeline.
Though Jaitley said the Bill's language and content was almost the same as the one by the previous UPA regime, the meeting, convened by parliamentary affairs minister M Venkaiah Naidu, could not arrive at a consensus.
With the NDA not having the majority in Rajya Sabha to ensure the passage of the Bill, sources said Jaitley sought the impasse to be resolved by Wednesday. Jaitley and Naidu wanted to know the specific objections of the opposition and had agreed to include meaningful recommendations of the Opposition in the Bill.