Editorial: Insuring a face saving

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Updated: Mar 12, 2015 9:53 PM

Govt and Opposition finally cooperate, if only a bit

Insurance Bill, Insurance Bill passed, Insurance Bill news, fdi in insurance, economic reforms, economic reforms in India, foreign investment cap, FDI cap in India, Indian economy, Parlaiment news, business newsIn the past, it was the Congress that was pushing for the Insurance Bill while the BJP was opposing it. (In photo: MoS for Finance Jayant Sinha speaking in Parliament in New Delhi on Wednesday.)

That the government and the Opposition parties have finally managed to compromise a bit to get a few Bills passed is good news given how virtually no business has got conducted over almost two sessions of Parliament now. While the Congress party was happy to play the role of the obstructionist Opposition, much like the Bharatiya Janata Party (BJP) before it won the elections, the ruling party needed to get Parliament to work if it was to convert 6 of its ordinances into Acts—despite the government issuing an ordinance on hiking FDI in insurance, for instance, no foreign insurance firm was willing to put in money since there was always the possibility the Bill could get voted down. In the event, the government agreed to send two of its Bills—on coal and on mines & minerals—to a select committee which has not been given a very long time to deliberate on it and make suggestions. Since the reports have to be in by March 18, the government has till May 8 to discuss the suggestions and work with the Opposition to clear the Bills in the current session itself. As for the insurance Bill, as part of this deal, the Congress party agreed to help its passage—indeed, in the past, it was the Congress that was pushing for the Bill while the BJP was opposing it. The passage of the insurance Bill, 7 years after the FDI hike to 49% was first proposed, is critical since, given India’s extremely poor levels of insurance cover as well as pensions, getting in more capital was paramount. It is only when companies have more capital that they can expand their networks while meeting the capital adequacy norms of the regulator. Indeed, a very large part of the Budget’s attention has been on finding ways to ensure higher insurance and pension cover for the poor.

None of this, however, means the government and the Opposition are any closer to finding a solution to the land Bill. Indeed, though the government has made some amendments, including a worrisome one on industrial corridors, this has not convinced the united Opposition an iota. Indeed, as has been visible over the past few weeks, the Opposition has only got more united. The government’s resolve has also got further strengthened and, with prime minister Narendra Modi deciding to devote his next radio talk ‘Mann ki Baat’ to the land Bill, it is obvious he is hoping to gather support directly. This will help the prime minister communicate directly to farmers the point his government has been trying to make in Parliament—that there has been no dilution in either the compensation or the R&R provisions of the Bill, that the infrastructure that will be created in the form of rural roads and irrigation will only help the farmers, that farmers have already got Rs 2,000 crore extra thanks to the NDA changing some provisions of the UPA’s land acquisition law. Whether the prime minister will succeed in getting farmers’ support and whether this will persuade the united Opposition to pass the Bill is not clear. What is clear though, is that the government and the Opposition can work together on less contentious issues. That’s a good sign.

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