Insurance bill cleared in Lok Sabha

The Lok Sabha today passed the Insurance Laws (Amendment) Bill, a key reform legislation, despite opposdition by Left and its allies but the Rajya Sabha hurdle remains and this has prompted the government to say that it will convene a joint session if it is defeated in the upper House.

The bill, which provides for raising the foreign investment cap from 26 per cent to 49 per cent, was passed by the Lok Sabha after a short debate.

Minister of state for finance Jayant Sinha, who piloted the bill, said the measure was crucial for the country as "our insurance penetration is low".

The bill, which has been pending since 2008, seeks to replace an ordinance on the subject, is likely to be taken up by Rajya Sabha after the Holi holidays. The bill will have to pass the test of Rajya Sabha where BJP and its allies do not have majority and the government is critically dependent on the support of the Congress.

"If Insurance bill is defeated in Rajya Sabha... it will open an opportunity for a Joint Session of Parliament," Sinha said after the legislation was passed by Lok Sabha.

"We will have to see who supports it in the Rajya Sabha as BJP lacks numbers," Sinha said.

Congress spokesman Abhishek Singhvi said his party is not against the bill per se but "We are opposed to the methodology, style and manner in which it has been brought bypassing Parliament."

He said his party was also against the fact that the government had changed the recommendations of the select committee which scrutinised the insurance bill.