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| Politics
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| FDI in insurance and pension: |
| FDI in insurance and pension: Future may well lie with BJP
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| INDIA
, 5-October-2012
4:59:46 AM |
| Whether the new reforms in pension and insurance sectors approved by the government will translate into reality could depend on the stand of the BJP. The cabinet cleared 49% Foreign Direct Investment for both key areas last evening, but the new policies have to be cleared in Parliament to become law.
Finance Minister P Chidambaram last evening talked of room for "discussion and negotiations." He said, "Many bills have been passed after discussion with the opposition, particularly the main opposition party." The BJP first said that it would like to study the fine print of the reforms. Prakash Javadekar also pointed out that in the past, when the BJP-led NDA government was in power, the Congress had opposed reforms to allow more FDI in retails.
The BJP is key because the Left, Mamata Banerjee, and some of the government's own allies are against FDI - Mulayam Singh Yadav, for example, who is helping prop up the government after it was reduced to a minority when Ms Banerjee and her Trinamool Congress left the coalition over the last big-ticket reforms which included raising diesel prices and allowing foreign retail mega-chains like Wal-Mart to set up shop in India.
The DMK, the second-largest member of the coalition after Ms Banerjee's exit, is also opposed to FDI.
While the UPA could push the reforms through in the Lok Sabha, it is in a minority in the Rajya Sabha.
On insurance reforms, Mr Javadekar pointed out that a parliamentary committee headed by BJP leader and former Finance Minister Yashwant Sinha recommended earlier this year that the cap on FDI should not be increased beyond the current 26%. The committee was unanimous in this opinion which means that the 13 Congress MPs on the panel were also against a change in policy.
The BJP will have to weigh the implications of being seen as anti-reform by the middle class voter, traditionally loyal to the party.
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