Govt seeks Congress support for Insurance Bill; open to new ideas

Hyderabad, Aug 3: Noting that the government is ready to consider any "meaningful" suggestions on the Insurance Bill, Union Minister M Venkaiah Naidu on Sunday appealed to opposition Congress and other parties to pass it in the current Budget session itself.

"The government would be happy to discuss with Congress and other parties about this bill. I propose to meet the important opposition leaders in Rajya Sabha tomorrow, along with Finance Minister Arun Jaitley. The government is willing to consider meaninful suggestions, if any, from opposition parties.

"That's why I fervently appeal to Congress and other parties to see the reason and support the bill in this budget session itself," the Parliamentary Affairs told reporters here. The bill slated to be introduced in rajya Sabha tomorrow. The amendments proposed to the pending legislation (the bill was first introduced in 2008) on the insurance sector are based on recommendations of the Standing Committee of Parliament, he said.

The proposed bill, which seeks to raise FDI cap in the sector to 49 per cent from the present 26 per cent, was sought to be tabled on Thursday last, but the government agreed to move it tomorrow as Congress and other parties wanted "adequate" time to study the proposed amendments, he said.

Congress or other parties should not have problem in supporting the bill as it was proposed by the previous UPA government, Naidu maintained.

"The spirit of the recommendations of the Standing Committee has been accepted by the government and we have proposed the amendments accordingly. It was mostly a bill proposed by the Congress party and its government and drafted by P Chidambaram, former Finance Minister.

"So, there should not be any problem for Congress or other parties to support the bill, unless they are ideologically opposed to it," the minister said. Observing that substantial domestic and foreign direct investment is sine qua non to drive economic growth and generate employment, Naidu felt that desired penetration and funds mobilisation had not taken place with the prevailing 26 per cent FDI cap in the insurance sector.

"Insurance is one sector which needs maximum investment. Despite 26 per cent foreign investment that is allowed under the existing norms, the desired penetration has not taken place and the domestic companies could not mobilise required capital level. "That's why the Government is proposing 49 per cent FDI in the insurance sector," Naidu said.

He expressed happiness over Chidambaram, "who has originally drafted the Bill", welcoming the legislation. "I agree with his comment that Government is a continuing entity and each Government should build on what has been accomplished by previous Governments."

"This Bill was proposed by Congress party and most of the amendments were suggested by Chidambaram at that time. Some of the amendments are based on the recommendation of Standing Committee. The only major change is that from 26 per cent (FDI cap), we are proposing to hike it to 49 per cent. I hope the opposition will see the reason," he said.

The present amendment is expected to infuse Rs 20,000 crore to Rs 25,000 crore additional equity in the fund-starved insurance sector, the Union Minister said. "The insurance companies have been unable to expand their reach. That's why we are proposing this amendment. We need the support of other parties in Rajya Sabha, where the Government does not have a majority," he added.

PTI