Budget 2011: Reform bills bring back Cong-BJP reform talks

The reformist bills are back, so is parliamentary politics over reforms. Will BJP help Congress, and what will BJP demand of Congress for its help?

The Budget lists seven bills under ‘Financial Sector Legislative Initiatives’. Three of the seven are important reformist bills: The Insurance Laws (Amendment) Bill, which proposes raising FDI limit from 26% to 49% and allows entry of foreign re-insurers; the Pension Fund Regulatory and Development Authority Bill, which gives legal backing to the body running the New Pension Scheme; and the Banking Laws Amendment Bill, which proposes increasing capital raising capacity of banks (whether the new version of the bill — the old version lapsed with the dissolution of the 14th Lok Sabha — will also address the issue of caps on foreign shareholders’ voting rights in Indian banks is not clear).

UPA-II has a majority in the Lok Sabha, but not in the Rajya Sabha. Even assuming support of BSP, SP and RJD, it will still be short of a majority. The arithmetic can change in UPA’s favour if a bunch of very small parties and Independents can be persuaded to vote with the alliance on a bill. But the best option for Congress is BJP support (the Left will never vote for these bills).

BJP is no stranger to these bills. The NDA government tried to work on these reforms as well. Sources in UPA and NDA say ‘Track-II’ talks on parliamentary co-operation for passing reformist bills are on, but that they are at very early stages.

Ravi Shankar Prasad, BJP Rajya Sabha MP and general secretary, said his party wasn’t opposed to reforms but that much would depend on the ‘fine print’ of the bills and on “how the government approaches the Opposition”.
Whether these bills would pass may also depend on the atmospherics between Congress and BJP leaders, say politicians from both sides of the parliamentary aisle.