Dec 9, 2011, 05.11AM IST
NEW DELHI: In a major setback to the UPA government still smarting from the FDI in multi-brand retail fiasco, Congress MPs joined opposition members in Parliament's standing committee on finance to reject three major bills relating to unique identification numbers, banking and insurance on Thursday.
The finance panel felt the UID Authority suffered from serious deficiencies over duplication of work with the registrar of census while it turned down the banking bill seeking to give investors in banks voting rights commensurate with their shares instead of the 10% cap at present.
The committee felt voting rights could be increased to 26% and no further while with regard to insurance, it felt there was no case to revise the foreign investment limit from 26% to 49% as proposed by the government. There was hardly a murmur of dissent with only Congress MP Rashid Alvi suggesting the UID bill be returned to government and not rejected.
The concurrence of Congress MPs on the panel with the reports is revealing as it points to a nervousness about FDI in various sectors in the ruling party at a time when the Manmohan Singh government is keen to beat back the "policy paralysis" charge with some vigorous reforms.
However, the Congress leadership remains committed to the UID scheme, with Rahul Gandhi telling a delegation on Thursday that UID would help in funds reaching the intended beneficiaries and also check corruption.
Apart from Alvi, Congress MPs on the panel include K S Siva Rao, Sambasiva Rayapati, Magunta Reddy, Sathyanarayana Sarvey, Dharam Singh, Manicka Tagore, Anjan Yadav, Jawaharlal Darda and K V P Rao. A Left MP submitted a note demanding that voting rights of investors in bank remain at 10%.
While the government has the option to reject the reports, it will find it hard to ensure passage of the bills in Rajya Sabha where the BJP and Left can come together to block the legislations. The lack of enthusiasm within the Congress will also be a source of concern for government managers looking to recover ground they lost to opposition over FDI in retail where a retreat looks like a rout.
The panel's decisions on the important banking and insurance bills threaten to take the wind out of government's reforms agenda. While discussing the banking bill, MPs felt the government must reconsider its proposal on giving voting rights to investors equal to their shareholding.
The MPs felt that putting a cap on voting rights at 26% would be appropriate at this juncture which can be reviewed at a later stage, sources said. The members, however, agreed to keep bank mergers outside the purview of the Competition Commission.
On the issue of UIDAI Bill, members pointed out inconsistencies in the government's stand with several ministries raising objections on execution and finances of the project. The MPs raised objection on no singular authority mandated to enroll all citizens for the Unique ID project. While UIDAI is mandated to enroll up to 20 crore in the first phase, the registrar general has also been asked simultaneously to enroll for UID card.
