This Article is From Aug 05, 2014

What PM Modi Has Riding on the Insurance Bill

(Ashok Malik is a columnist and writer living in Delhi)

Parliament and parliamentary procedure can be fascinating. In particular, the case of the Insurance Bill, which promises to raises the FDI cap in insurance companies from 26 to 49 per cent, is worth noting. The new cap was part of the announcements made by Arun Jaitley during his Budget speech on July 10.

The government obviously had the numbers to pass the Bill in the Lok Sabha and was hoping for one of two things in the Rajya Sabha:   one, the Congress would cooperate, and support a Bill of which a variation it had itself proposed when in power; two, the Rajya Sabha would reject the Bill. The government would then begin the process of calling a Joint Session of Parliament, where the majority was in its favour, and pass the new law.

This seemingly straightforward "either-or" situation was complicated by the Opposition wanting to send the Bill for scrutiny by a Select Committee. It alleged the changes proposed (when compared to the UPA-era Insurance Bill) were substantive. So for the past few days, the Rajya Sabha saw the bizarre situation of the government pushing for a vote and almost urging the House to defeat the Bill, so that a Joint Session could be called and the matter could be done with. The Opposition, in turn, resorted to a type of filibustering and insisted on the Select Committee. With the Select Committee demand pending, the Bill could not be voted upon, for that was the procedure.

The Rajya Sabha has 245 members, of whom only 60 belong to the NDA. The Congress has 69 members, the JD(U) 12, the Trinamool Congress 12, the Left Front 11, and the Uttar Pradesh twins, the BSP and the SP, between them 24. This coalition came together to thwart a vote on the Insurance Bill. The government was counting on the AIADMK (11 seats) but the Tamil Nadu party said it was opposed to the Bill. The BJD (seven seats), the NCP (six seats) and the DMK (four seats) supported the government, but this was not enough.

When it came to the crunch, the BJP felt the 12 nominated MPs, sent to the Upper House in the "Distinguished Members" category by the previous government, would vote along with the Congress. This list included businesswoman Anu Aga and movie star Rekha. As an aside, it would have been piquant to see how cricketer Sachin Tendulkar voted. He has appeared in advertisements for insurance companies that have a large slice of FDI.

At one level, the Congress is paying back the BJP in its own coin and making up for the troubles it had in Parliament (particularly in the Rajya Sabha) when the UPA government was in power. The BJP did help the Congress in passing big-ticket social-welfare legislation, which was too politically correct to oppose. Nevertheless it resorted to hostile tactics in Parliament when it came to the India-United States Nuclear Deal (UPA I) and the proposal to open up FDI in multi-brand retail (UPA II).

While this superficial comparison is true, a few things need to be said. First, the mood of the Congress hardened during the course of this session of Parliament. In the early days following the Budget, senior Congress politicians had informally indicated they would back the Insurance Bill. In the weeks that followed, Sonia Gandhi changed her mind and calculated a determined attack was the better option. This was probably linked to her personal implication in the National Herald case.

Second, the intellectual content to the Opposition's firepower came from the Trinamool and the Left Front. The Congress contributed nothing; it raised no robust objections to the Insurance Bill and suggested no concrete changes. In fact, it did not propose a single amendment. This would indicate its decision to not allow a vote was an afterthought.

Third, the Opposition wants to deny Narendra Modi a new insurance law that he can showcase as a symbol of opening up the economy when he travels to the US in September, and particularly for his meetings with American CEOs. In this it would appear to have succeeded. Unless there is a dramatic turnaround, the Insurance Bill will go to a Select Committee, be voted on in - and perhaps even be rejected by - the Rajya Sabha in the Winter Session in November, and then be passed by a Joint Session.

Joint Sessions have been few and far between in Indian parliamentary history. Early on in its interactions with regional parties, the Modi government made it plain it was willing to consider very frequent Joint Sessions to pass law after law, if that became necessary. In the coming months and years that threat will have to be put to action - unless, after the heat and dust of the Insurance Bill settles, the AIADMK returns to the Modi corner, and the Trinamool Congress and either the SP or the BSP can be won over to back future legislation.

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