President Pranab Mukherjee signed two key ordinances, clearing the way for the auction of coal blocks that were ordered cancelled by the Supreme Court, and for a hike in foreign equity cap in the insurance industry from 26 percent to 49 percent.
The legislations for the two measures could not be taken up in the Rajya Sabha as the opposition did not allow the upper house, where the government is in minority, to conduct business during the last few days of the winter session that ended Tuesday.
A cabinet meeting Wednesday, presided over by Prime Minister Narendra Modi, decided to issue the two ordinances so as to send a strong signal that the government will pursue reforms and would not allow disruptions in parliament to come in the way, an official said.
The ordinance on coal is necessary for the government to hold auctions for the blocks that were ordered cancelled by the Supreme Court, while that on insurance will operationalise the reforms in the sector, the bill for which was okayed by the Select Committee of the Rajya Sabha.
“With the repromulgation of the ordinance on coal, the unfinished process of allocations can begin again,” Finance Minister Arun Jaitley said after the cabinet decision, adding that reforms will not be halted if the opposition does not cooperate.
The government has, in fact, moved quickly on the coal auctions.
A day after the cabinet approval for the allocation of coal blocks, a web portal was formally launched for e-auction of 24 coal mines which will be held in February. Soon after, the tender documents were also released.
“Twenty-four blocks are being put up for auction in the first stage. The process will benifit the common man. Power tariff will not go up, I assure you, because in this case it will be reverse bidding, and tariffs will come down,” Coal and Power Minister Piyush Goel said.
On insurance, the industry expects the upward revision in the foreign equity limits to result in an additional capital infusion of around Rs.50,000 crore ($8 billion) by 2020. This apart, it is also expected to help in increasing insurance penetration that is abysmally low now.
The Indian insurance sector has 52 players — 28 in non-life business and 24 in life.