New Delhi: Keeping with its promise that "reforms are here to stay", the UPA government is planning to introduce more reforms in the country. The latest being the 26 per cent FDI in pension and 46 per cent in insurance, which the Cabinet is expected to clear on Thursday.
But as the government is preparing for the second round of reforms, the Opposition is getting ready to stymie the move. With the Bharatiya Janata Party (BJP), Left Front, Trinamool Congress, Samajwadi Party, Bahujan Samaj Party and Biju Janata Dal voicing their opposition against the government’s reform plans, the passage of the two bills in Parliament is likely to be a stormy affair.
FDI in pension
Currently, no foreign investment is allowed in the pension sector. If the amended Pension Bill with 26 per cent FDI is cleared, it will give statutory powers to pension regulator. But the clearance of the bill will need Parliamentary ratification. While the BJP has no objections with the 26 per cent cap in pension, its leaders have made it clear that they will not support the move to raise it.
Raising FDI limit in insurance
Currently, 26 per cent FDI is allowed in the insurance sector. The government wants to increase the cap to 49 per cent as it will help insurance firms in expanding their base. Political support in Parliament is crucial for the government to get the bill passed and with most the parties like the BJP, Trinamool Congress, Samajwadi Party, Bahujan Samaj Party, Biju Janata Dal, Left parties against the move, the clearance of the bill looks difficult.
Amended Companies Bill
The government has been trying to get the amended Companies Bill passed for sometime now. The changes in the Companies Bill aim at improving corporate governance, increasing transparency and making independent directors more accountable.
National Investment Board
A proposal to set up a National Investment Board (NIB), to be headed by Prime Minister Manmohan Singh, for according fast-track clearances to infrastructure projects is also under consideration.
Amendments to Forward Contracts Act
The government is also considering getting the Forward Contract Regulation Act (Amendment) Bill passed. The new bill will empower commodity markets regulator FMC with greater financial autonomy, facilitate the entry of institutional investors and introduce new products for trading such as options and indices. The government claims it will help farmers in getting better prices.
To get these bills passed in Parliament, the UPA needs a simple majority in both Houses. With Mamata Banerjee's Trinamool Congress gone, the government is dependent on the Samajwadi Party and Bahujan Samaj Party for bailout.
At the moment, the UPA has 254 members in the Lok Sabha. According to Parliament rules, the government needs to have a simple majority from those members who are present and voting to get a bill passed.