These steps are part of what has been hyped as the second wave of economic reforms. However, the government will find it difficult to push through the same in Parliament since important constituents of the ruling coalition as well as some opposition parties are totally opposed to the Pension Fund Regulatory and Development Authority Bill.
As far as insurance is concerned, till date 26 per cent FDI was permitted in the sector. It is noteworthy that Insurance Regulatory and Development Authority chairman J Hari Narayana had just yesterday called for a higher FDI limit. "Unless we go for 49 per cent, we will not have the kind of capital required to underpin the growth of insurance industry," he stressed.
Earlier, the Centre approved 51 per cent FDI in multi-brand retail on Sept 13 but five days later the Trinamool Congress walked out of the UPA in protest.
Due to the TMC's exit, the government was reduced to a minority but Samajwadi Party chief Mulayam Singh Yadav said that they will not allow it to fall as he does not want "communal forces" to take advantage of the situation.
The FDI issue was not the only sticking point, the Mamata Banerjee-led party was also unhappy over the steep hike in diesel price and the cap on LPG cylinders.
The Jharkhand Vikas Morcha (Prajatantrik) also withdrew support to the UPA subsequently.