BJP, Congress working on deal over Insurance Bill

Tensions between BJP and Congress over the Insurance (Amendment) Bill appear to be thawing, with both sides seeking to negotiate a deal where the government will agree for the reforms legislation to be sent to a select committee in exchange of an assurance for its passage at the beginning of the winter session. Sources said the government has veered round to accept the demand for sending the bill to a select committee on the condition that the panel finishes its scrutiny in a time-bound manner and, more important, speedily enough for the bill to be brought to Rajya Sabha at the outset of the winter session.

Congress sources confirmed that negotiations are on between the two sides, and strongly indicated that the party will allow the bill smooth passage if the government drops the amendment which seeks to explicitly enlarge the definition of “foreign investment” to include foreign institutional investors. Although the Insurance Act does not bar FIIs from investing in insurance companies and, thus, the amendment proposed by the Modi government merely carries forward the current policy, Congress does not agree.

“This amounts to a substantive amendment,” said a Congress source familiar with details of the parleys. He also said all other amendments being insisted on by the opposition were “technical” in nature. Significantly, he said the issue of who should head the select committee was negotiation, reflecting a degree of flexibility which augurs well for passage of the long-pending legislation during the current year.

Government may be keen to have a BJP MP as the head of the committee in order to ensure that the legislation is readied in time to be moved in Rajya Sabha. Sources also said back channel negotiations were on with others in the opposition in order to get them to relent on their opposition to the insurance bill. A government source said some regional players appeared “ready to be persuaded”.

Government’s failure to get the insurance legislation passed was a setback for the BJP as the party was keen to display its reform intent as well as its capacity to deliver. However, government managers feel an understanding with Congress for passage of the bill in the winter session will repair the damage substantially. Whether they will be able to implement what is being called Plan B will be clear if they succeed in carrying through the amendments to three labour laws.

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