3:54 pm - Wednesday November 4, 2015

Modi orders insurance, coal reforms after stymied by parliament

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The cabinet approved an executive order on Wednesday to implement coal and insurance reforms, a government official said, underlining the administration’s resolve to push through economic measures despite political opposition in parliament.

Under the order, foreign firms can increase their participation in insurance joint ventures from 26 percent to 49 percent, a potential lifeline for a sector starved of capital and squeezed by regulations.

The move came after the government’s plan to introduce a bill to increase the foreign investment cap was blocked in the upper house of parliament by opposition deputies who demanded that it rein in Hindu hardliners pushing a partisan agenda.

Modi won a national election this year but he lacks a majority in the upper house which is indirectly elected by state legislators.

Finiancial firms led by Max India (MAXI.NS) and Reliance Capital (RLCP.NS) rallied on news of the government decree which has to be approved by lawmakers within six weeks of the opening of the next session of parliament – scheduled for the start of February.

The cabinet also renewed another order opening up the coal industry to the private sector after a bill on the issue similarly failed to make headway in parliament.

“Both insurance and coal ordnance were cleared by the cabinet this morning,” a government official said, speaking on condition of anonymity.

The president has to sign off the decrees.

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