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Cabinet defers decision on Insurance and Pension reforms bill

On ground of anonymity Finance Ministry official told that on account of time crunch, Government has postponed its decision to present two bills pertaining to insurance and pension sector to the next session of parliament, thereby delaying the plans to repair the slacken economy. 

Government had planned to put 25 bills before the house of Parliament during the winter session starting November 22, 2012. Some of these bills included Foreign Direct Investment (F.D.I) in retail, aviation, broadcasting, mining, food security, insurance and pension sector etc. The bills were passed allowing F.D.I. in retail, aviation and broadcasting. However bill seeking Parliament approval to raise F.D.I. limit from 26% to 49% in insurance and pension sector could not be passed. Finance Minister P. Chidambaram quoted that Parliament will not vote during this session on a long-awaited insurance bill aimed at raising the foreign investment cap to 49 percent from 26 percent in the industry. He did not comment anything on the pension bill.  The government had earlier planned to get parliament's consent for the insurance bill during the winter session, but these bills could not be place before the Parliament for approval as opposition parties’ interrupted Parliament proceedings for several days, demanding the government to scrap its decision on increase F.D.I. in Insurance sector. The government's step on retail-sector liberalization didn't need parliament's approval, but it accepted opposition's demand for a vote on the issue which it ultimately won in both houses. 

Though the government could not take all the bills for discussion, some key ones such as banking regulation bill, companies’ bill and a constitutional modification to raise reservation in government jobs for people belonging to hard-up group have been cleared by one house of parliament. Both the bills will now be put for approval to the upper house to become law. The next session of parliament is expected to commence in February wherein pending bills will be put for voting and approval. Other bills that the government couldn't take up for debate yet include those related to land acquisition, mining, food security and direct taxes.

The banking bill which was cleared by lower house endeavor to make stronger the Central Bank’s regulatory control, making the way for improvement of the banking sector that could inflow funds from foreign banks as well as local industrial companies. Whereas Companies bill cleared by lower house of Parliament aims to improve corporate governance standards and make it mandatory for companies to allocate a part of their profits for social work. 
The Land bill seeks to rationalize the land – acquisition process for industry, while the food security aims to provide subsidized foodgrains to more than 60% of the country’s population. The mining bill aims to bring every aspect of mining – exploration, grant of leases, royalty payment, land acquisition, investigation and prosecution of illegal mining under a single law. 
The Direct Tax Code aims to replace the country’s outmoded income tax laws with simple tax procedures and improve tax compliance.

According to Mr. D.K. Joshi, Chief Economist from CRISIL said that ‘Given the volatile political scenario, there has been positive development on both Economic reforms as well as pushing the key reforms and that more will come up with political consensus’. This winter session was a test to the Congress party – led ruling coalition’s political management skill.

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