Insurance reforms deadlocked

New Delhi: The Bharatiya Janata Party-led (BJP-led) National Democratic Alliance (NDA) is continuing to discuss, with other parties, including its rivals, ways out of a legislative impasse over the passage of a Bill raising the ceiling on foreign direct investment (FDI) in insurance companies, and may even consider calling a joint sitting of Parliament to get its way.

The passage of the Insurance Laws (Amendment) Bill is seen by some analysts as an indication of its reformist intent and a test of its ability to push through legislative reforms at a time when it doesn’t have the requisite numbers in the Rajya Sabha.

Bills such as the insurance one that raises the cap on FDI from 26% to 49% require to be passed by both houses of Parliament. The NDA has 334 members of Parliament (MPs) in the Lok Sabha but has only 57 in the Rajya Sabha. Even with the support of seven members of the Biju Janata Dal (BJD) and the six of the Nationalist Congress Party (NCP) that support the Bill, it doesn’t have the required numbers in the 245-member upper house. The Lok Sabha has 545 members.

“We have already conveyed it to the government that BJD will support 49% FDI in insurance Bill. We made our stand clear at the all party meeting also,” said Bhartruhari Mahtab, Lok Sabha MP and senior leader of BJD.

The government held off on introducing the Bill in the Rajya Sabha after a meeting of all political parties on Monday didn’t result in any consensus. The Bill was introduced by the Congress-led United Progressive Alliance (UPA) when it was in power, but the Congress as well as other rivals of the BJP wrote to the chairman of the Rajya Sabha last week, suggesting that the Bill be referred to a Parliamentary panel because it has substantial changes introduced by the current government. The BJP’s position, articulated by finance minister Arun Jaitley at the meeting, is that the changes are minor and that the Bill is largely the same one introduced by the UPA.

“The meeting remained inconclusive. We have agreed to meet again in the next two days to arrive at a consensus on the possible formulation of the legislation,” Praful Patel, senior leader of NCP, who attended the meeting on Monday morning, told reporters.

Patel said his party would support the legislative changes as it was something that their government, the UPA, had piloted previously.

“Naidu further said (that) given the government’s willingness to consider suggestions of the opposition in the matter, Congress and other parties should enable passing of the Insurance Laws (Amendment) Bill, 2008 in the current Budget Session,” a government release said.

The government is trying to get the support of Tamil Nadu chief minister J. Jayalalithaa’s All India Anna Dravida Munnetra Kazhagam (AIADMK) to pass the Bill. The AIADMK has 37 members in the Lok Sabha (where the NDA doesn’t really need any help), and 11 in the Rajya Sabha. Interestingly, the AIADMK supported the parties seeking that the Bill be recommended to a Parliamentary committee, but wasn’t a signatory to the letter to the Rajya Sabha chairman.

Despite the opposition of the BJP’s ideological parent, the Rashtriya Swayamsevak Sangh, to the proposal, the NDA is pushing for an increase to the FDI ceiling in insurance because it believes this will send the right message to foreign investors. Analysts say it will also set the right context for Prime Minister Narendra Modi’s visit to the US, expected in September.

Irrespective of which way the AIADMK votes, the balance is tilted against the NDA in the Rajya Sabha, which is why some BJP leaders have been mentioning a joint session of Parliament.

However, according to Subhash C. Kashyap, a constitutional expert, the government can call for a joint sitting only when there is a “final disagreement” on the Bill between the two Houses.

“A disagreement can be in two situations. One, if the Lok Sabha passes the Bill and the Rajya Sabha defeats it. Two, if the Lok Sabha passes the Bill and the Rajya Sabha passes it with some amendments and sends it back to lower House which disagrees on it. In either of the two cases, the government can call for a joint sitting,” Kashyap said.

According to Parliamentary rules, “...the President may call a joint sitting of the two Houses to resolve the deadlock. If, at the joint sitting of the Houses, the Bill is passed by a majority of the total number of members of both the Houses present and voting, with the amendments, if any, accepted by them, the Bill is deemed to have been passed by both the House..”

Analysts say the BJP’s mention of the possibility of a joint session may just be tactical. As Kashyap puts it, if the Rajya Sabha decides to send the Bill to a parliamentary committee, which it can, given the 133 members who want to do so, then the government can do nothing to stop it.

A minister who attended the Monday meeting said the government would prefer that the Bill not be referred to a committee. It has given the opposition three options, this person added, asking that he not be identified: pass the Bill in its current form, defeat it, or suggest changes for amendments.