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President signs ordinances for coal auction, insurance reforms

President Pranab Mukherjee on Friday signed the ordinances moved by the government on raising FDI in insurance sector and facilitating e-auction of coal blocks.

The Union Cabinet had earlier approved key insurance and coal sector reforms this week which were stuck in Parliament logjam.

The Insurance Laws Amendment Bill, 2008 could not be taken up for discussion in Parliament despite being approved by the Select Committee of the Upper House because of the uproar over the conversion and other issues.

Hiking of the foreign investment cap in the insurance sector to 49 percent, which has been pending since 2008, will result in capital inflow of USD 6-8 billion.

The Coal Mines (Special Provisions) Bill, 2014 has already been approved by the Lok Sabha during the session but could make no progress in the upper House.

The re-promulgation of ordinance on coal will facilitate e-auction of coal blocks for private companies for captive use and allot mines directly to state and central PSUs.

There are 52 insurance companies, of which 24 are in the life insurance business and 28 in general insurance segment. The total capital deployed in the private life insurance sector is close to Rs 35,000 crore. With FDI at 26 percent, foreign equity is close to Rs 8,700 crore.

The move came against the backdrop of the Supreme Court in September quashing allocation of 204 coal blocks to various companies since 1993.

The re-promulgation of the Ordinance will enable the Coal Ministry to go ahead with its decision to give a total 101 mines, including 65 through auction, in the first phase.

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