While the Left parties strongly opposed the moves, the Bharatiya Janata Party (BJP) is ambivalent in its stance. Congress spokesperson Raashid Alvi said the party fully supported the decisions to hike foreign investment in insurance and allow it in the pension sector and would approach other parties to convince them that the measures were in the interest of the country.
“We are very hopeful to get all these bills passed in both the houses,” Alvi told IANS. Asked about the government lacking numbers, particularly in the Rajya Sabha, Alvi said he was not going into the arithmetic.
“We will try our best to convince (political parties),” he said. In a further push to economic reforms, the cabinet Thursday gave its nod to raise foreign direct investment (FDI) in insurance from 26 to 49 percent and allowed up to 49 percent foreign equity in the pension sector.
The cabinet also approved some other long-pending measures such as crucial changes in the Companies Act and giving greater autonomy to the regulator to introduce more commodities and options for futures trading.
The Communist Party of India-Marxist (CPI-M) said the decisions would “make India’s finance sector more vulnerable to speculative finance capital”. “The decision to allow FDI in pension funds will jeopardise the savings of millions of employees in the country,” the party said in a statement.
The party appealed to political parties to defeat the measures in parliament. Communist Party of India leader A.B. Bardhan said the government was “acting in the interest of big business and industralists”.
Finance Minister P. Chidambaram Thursday indicated that the government was expecting support from the BJP on its decisions. Chidambaram said he was “optimistic that all sections of the house, especially the principal opposition,” would help approve the legislations concerning government decisions.
The BJP, however, has so far remained ambivalent on its support to the government decisions. Party spokesperson Prakash Javadekar had said Thursday that the party was not opposed to FDI in insurance and pensions sectors but wanted some conditions to be met to “safeguard the interest of the people”.
He said the party will give its final comment after studying fineprint of government decisions. The party is expected to spell out its stance in greater detail Friday.
Sources said the government will face an uphill task to get the pension and insurance sector decisions approved in parliament due to its present numerical strength in the two houses.
Trinamool Congress, a former ally of the Congress, has already said it will work towards moving a no-confidence motion against the government. The Congress is expected to try and convince its outside supporters including Samajwadi Party and Bahujan Samajwadi Party to back the government decisions.
The sources said given the numerical arithmetic, it would not be easy for the government to get the bills passed in parliament. While the UPA is in majority in the 543-member Lok Sabha with backing of its outside supporters, its strength in the Rajya Sabha even with declared outside support remains below the halfway mark of 123.