President signs ordinances on insurance, coal sector reforms
President Pranab Mukherjee has signed ordinances moved by Union government on raising foreign direct investment (FDI) cap to 49 per cent in insurance sector and facilitating e-auction of coal blocks.
Earlier, in this regard Union Cabinet had approved promulgation of an Ordinance on Insurance Bill and re-promulgation of the Coal Ordinance.
Government opted for ordinance route because
- The Insurance Laws Amendment Bill, 2008 was not able to pass in Rajya Sabha because of the logjam in upper house. It aims hike the FDI cap in the insurance sector from 29 per cent to 49 per cent. It will help to capital inflow of $6-8 billion.
- The Coal Mines (Special Provisions) Bill, 2014 was passed by the Lok Sabha in December 2014, but was stalled in Rajya Sabha. It seeks to facilitate e-auction of coal blocks for private companies for captive use and allot mines directly to state and central PSUs.
These ordinances will pave the way for additional foreign investment in insurance sector and to move ahead with the re-allocation of cancelled coal mines. Thus facilitating reforms in these sectors.
Article 123 of Constitution: It gives legislative power to President. He can issue ordinances when Parliament is in recess i.e. not in session if there is urgent need to have a law on some urgent public matter. The ordinance has similar effect to an act of parliament.
However, every ordinance must be laid and approved by both houses of the parliament within 6 weeks from the reassembling. If not placed and approved by both houses of the parliament after reassembling it becomes invalid.
Categories: Economy & Banking Current Affairs