Kalyani Shankar
What is the politics behind the Insurance bill? It is stuck in Rajya Sabha more for political reasons than for its merits. There is no doubt that in most economic policies, the Congress and the BJP were on the same page or else the reform process could not have moved forward in the past two decades. The Insurance bill has become the casualty because of the politics being played by the political parties, particularly the Congress and the BJP. When the bill was introduced in 2002 by the Vajpayee government, the Congress, which was in the opposition, opposed it. When the Manmohan Singh government brought it in 2008 raising the foreign investment cap from 26 per cent to 49 per cent, the BJP, sitting in the opposition opposed it. Politically it was expedient to oppose it for both. Now it is the turn of the Congress again when the BJP has brought the bill raising the FDI cap to 49 per cent.
The insurance sector is important, as many Indians still do not have the benefit of insurance cover. It can attract as much as Rs 22,000 crores of foreign investment according to one estimate. The sector is growing at a rate of 15-20 per cent. Together with banking services, insurance services add about 7 per cent to the country’s GDP and provides long- term funds for infrastructure development besides strengthening the risk taking ability of the country.
Except the left parties, which have been opposing the financial sector reforms right from the beginning, even most of the regional players do not have much stake in the passing of the insurance bill. In such a scenario, why is the impasse on this important bill?
The Congress is still smarting from its humiliating defeat in the 2014 Lok Sabha polls but it can flex its muscles in the Rajya Sabha where the NDA is in a minority. While the Congress has been able to mobilize the support of 11 other opposition parties including the SP, BSP, Left, AIADMK, National Conference, Trinamool Congress and others to stall the bill, the BJP is unable to break this unity to support the bill. The opposition wants to tire the BJP out and delay the bill.
Why is the BJP keen to get the bill passed at whatever cost? Finance Minister Arun Jaitley is willing to go more than halfway to achieve this. The Prime Minister is going to the US next month for his first meeting with the US President Obama in Washington and he wants to be armed with the passage of this important financial reform, which the US and other western countries had been insisting. As it is the Indo – US relations are not on the best of terms due to various issues including the denial of visa for Modi earlier, the recent WTO impasse, delay in the reform measures and lack of progress in the nuclear business. Despite overtures from the Obama administration, the recent visit of the US Secretary of State John Kerry was not a great success. Therefore Modi would like to show some forward movement in the insurance sector. But it is clear that the opposition does not want to provide him that opportunity and insist on sending to the select committee for further scrutiny in view of the amendments brought by the government. The government is not in favor of it because it will delay the process by at least another six months. There is also another allegation that Congress is using this as a bargaining point to get the Leader of Opposition slot for the party, which the BJP is not willing to give.
Interestingly, even within the Congress there is no unanimity about the bill. The pro- reform lobby led by former Prime Minister Dr Manmohan Singh wants the bill to be passed and assume the authorship of the bill. There is another view, which wants the bill to be referred to the select committee. Yet another lobby, which feels that the party lost the polls because of its pro reform face and the bill should be disowned.
The Government has received a shot in the arm when Congress’s ally NCP announced its support for the bill, which has been backed also by BJD, another non-NDA ally. The BJP was hopeful of winning over SP and BSP but so far, there has been no breakthrough.
There are not too many options for the BJP if Prime Minister Narendra Modi has to leave for the US armed with this insurance reforms bill. That is why the Finance Minister Arun Jaitley had even offered to change the language of the bill to suit the Congress but the Congress has its own game to play.
The last option is to convene a joint sitting, as provided under Article 108 of the Constitution to resolve Parliamentary stalemates. The Vajpayee government used this to get the POTA bill passed.
There can be a way if the Congress agrees to sit with the government to work out a formula acceptable for all. It would then be seen as a constructive opposition. Political parties should give up this opportunism, as it will affect the future of the country as also its economy. This is the first test for the Modi government to push through financial sector reforms and if it fails it will send a message that Modi is not serious about his campaign promises. (IPA)
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