Ordinance Way for FDI in Insurance

Published: 25th December 2014 05:54 AM  |   Last Updated: 25th December 2014 07:56 AM   |  A+A-


NEW DELHI: A day after the Winter Session of Parliament was adjourned sine die, Union Cabinet met to approve a hike in foreign investment cap in the insurance sector from 26 to 49 per cent and coal auction, through an executive order.

The government decision to take the ordinance route so soon after the session was justified by Finance Minister Arun Jaitley. Tangentially referring to the logjam in Rajya Sabha, he said the country cannot “wait indefinitely’’. The Ordinances, the Finance Minister asserted following the Union Cabinet meeting on Wednesday, “demonstrates the firm commitment and determination of government to reforms.’’ He said that it “also announces to the rest of the world, including investors, that this country can no longer wait even if the House waits indefinitely to take up its own agenda.’’

Both the measures — the ordinance to raise FDI cap in the insurance sector and re-promulgation of the ordinance allowing resumption of coal block auction-could not be taken up in Rajya Sabha due to frequent disruptions over religious conversion and other such issues in the just concluded session.

Quite significantly, Jaitley tried to point out that “if Parliament is not allowed to function, the framers of the Constitution had made provision so that decision does not come to a halt.’’

The Opposition has been alleging that the government is keen to push the reforms in the insurance sector ahead of US President Barack Obama’s visit as chief guest of the Republic Day function here in New Delhi. In this context, a senior Cabinet Minister said that the ordinance route would not be a hindrance in attracting investment in the insurance sector.

“Ours is not a ragtag coalition that one ordinance will bring it to an edge, the world can see we are a politically stable majority government. The Opposition is making a mistake, the political scenario has changed. No cross party consensus is needed any more,’’ the minister added.

President Pranab Mukherjee, however, has to sign off the Ordinances which a government can bring “due to emergent’’ reasons, and is expected to do so soon.

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