Sunil Jain and Shobhana Subramanian
With the BJP yet to decide on whether to push for a discussion with voting on FDI in retail, BJP leader and finance standing committee chief Yashwant Sinha indicated the party may be more willing to let certain legislation through in the coming winter session of Parliament. While saying this in an interview to FE (see Reflect, Page 9), Sinha reiterated the party’s view that the government was trying to bypass Parliamentary standing committees in several cases right from the previous finance minister introducing GAAR without even examining the standing committee's views to the GST Constitutional Amendment Bill and even the Direct Taxes Code.
While Sinha insists his party will not go along with hiking FDI limits in insurance to 49% — he says no one was able to convince the standing committee as to why this was needed — he offered a ray of hope. When asked whether the BJP would be amenable to allowing a separate 23% equity holding window for FIIs or overseas corporate bodies (essentially NRIs) — this was part of Sinha’s insurance bill that, ironically, the Congress diluted — he said the government had not yet come up with this formulation. When asked if the standing committee would agree to this formulation if it was brought before it, he said a comment could be given only after the proposal was brought, signalling some negotiating room for the government.
As far as amendments to the Banking Regulation Act are concerned, critical if RBI is to start processing applications for new bank licences, Sinha said it could get passed if the government accepted the committee’s recommendation that voting rights be capped at 26%, irrespective of what the shareholding pattern was — the Cabinet cleared this some months ago, making it relatively certain the Bill could get passed.