Govt takes ordinance route for key reforms

Girja Shankar Kaura

Tribune News Service

New Delhi, Dec 24

Looking to bring about fast-paced reforms in the key sectors like insurance and coal, the Union Cabinet today approved promulgation of the ordinance on Insurance Bill and re-promulgation of coal ordinance. It also opened the medical devices sector to foreign investment by allowing 100 per cent FDI in these devices which are part of the pharmaceutical sector.

The move from the government came just a day after the conclusion of the winter session of Parliament, with the Union Cabinet headed by Prime Minister Narendra Modi moving quickly to approve all the decisions.

Even as the principal opposition party, Congress and also the Left parties criticised the government’s move, Finance Minister Arun Jaitley retorted by saying that the country cannot wait even if one of the Houses of Parliament “waits indefinitely”.

Briefing reporters after the Cabinet meeting, Jaitley expressed the hope that hiking of the foreign investment cap in the insurance sector to 49 per cent, which has been pending since 2008, will result in capital inflow of $ 6-8 billion.

"The Ordinance demonstrates the firm commitment and determination of this government to reforms. It also announces to the rest of the world, including investors, that this country can no longer wait even if one of the Houses of Parliament waits indefinitely to take up its agenda," Jaitley said.

The move was also welcomed by the industry. Chandrajit Banerjee, Director General, CII said: "The increase in the FDI limit from 26 to 49 per cent will help attract the much-needed long term capital for the sector and would have multiplier effect on the state of economy, especially in meeting the huge infrastructure financing requirements. Further, the long-awaited reform will help create a conducive environment for reviving investments and sustaining growth in the Indian insurance industry."

However, the Congress said this government was weakening institutions. It began by promulgating an ordinance to appoint an individual (Principal Secretary to PM, Nripendra Misra).

“What was the urgency to issue these ordinances a day after Parliament got over,” asked party general secretary Shakeel Ahmed.

CPM member Sitaram Yechuri has written to President Pranab Mukherjee on the issue and pointed out that the issue was still to be deliberated in the House and since a select committee has scrutinised the Insurance Bill and tabled it in the Rajya Sabha, it was a property of the House on which a decision is pending. This, he said was in violation of the sanctity of Parliament proceedings. However, the Cabinet cleared the ordinance to increase FDI cap from 26 to 49 per cent in the insurance sector and re-promulgated the ordinance to allow resumption of coal block allocation.

Both the measures could not be taken up in the Rajya Sabha in the winter session that concluded yesterday and was marred by disruptions over religious conversions.