The Indian government on Friday passed executive orders increasing foreign investment in the insurance sector and allowing fresh auctions of coal blocks, in moves seen as signalling the ruling Bharatiya Janata Party's intent to push through economic reforms. The executive orders, also known as ordinances, were cleared by the federal cabinet Wednesday after the legislation failed to pass in parliament.
Opposition parties would not allow votes on the long-pending Insurance Laws Amendment Bill, 2008, and the Coal Mines (Special Provisions) Bill, 2014, in the Rajya Sabha or upper house of parliament amid an uproar over religious conversion and other issues.
The BJP has a majority in the Lok Sabha or lower house of parliament but not in the upper house. The insurance bill raises the limit on foreign participation in the insurance sector from 26 per cent to 49 per cent.
"The increase will help attract much needed long-term capital for the insurance sector and would have a multiplier effect on the state of the economy," said Chandrajit Banerjee, director of the Chambers of Indian Industry.
The ordinance on coal is expected to facilitate the electronic auction of coal blocks for private companies and allot mines directly to state-run companies.
In September, prior allocations of coal blocks were cancelled by the Supreme Court, which said the allocations were done through an illegal and arbitrary process.
The court had directed the government to hold fresh auctions of the blocks.
Private players in the coal industry said the court's decision and delay in fresh auctions would hit investor confidence, affect power capacity and raise the cost of coal.
An ordinance is an executive order given by the government to push through legislative policies when parliament is not in session. It is valid for six months under Indian law and the bill has to be to passed by parliament within this period.