Modi may order insurance, coal reforms if vote delayed - officials

By Rajesh Kumar Singh

NEW DELHI (Reuters) - Prime Minister Narendra Modi may consider using an executive order to push through laws overhauling the insurance and coal sectors, if the increasingly fractious parliament fails to pass them soon, two government officials said on Friday.

Bitter and sometimes sectarian disputes between ruling party and opposition lawmakers have held up a number of bills scheduled for this session, raising concerns among investors about Modi's ability to pass reforms to revive the economy.

Modi may resort to the rarely-used order to lift the caps on foreign investment in the insurance sector to 49 percent and renew another order opening up the coal industry to the private sector, if parliament fails to pass them before it adjourns on Tuesday, the officials told Reuters.

"The route is always available but we are yet to decide," said one official, who is not authorised to discuss the matter publicly. "We will take a call after seeing what happens in the remaining part of the session."

Such an order will need to be approved by lawmakers within six weeks of the opening of the next session of parliament - scheduled for the beginning of February. India's president would also need to agree to the decree.

Modi, who was elected in May on the back of promises to boost jobs and economic growth, has seen his reform agenda stymied by divisive statements by lawmakers in his Hindu nationalist party.

Opposition parties have been protesting for more than a week after a Hindu priest-turned-lawmaker in Modi's party said he planned to support an event that organisers said would mark the conversion of thousands of Christians to Hinduism in the northern state of Uttar Pradesh on Christmas Day.

The ceremony was cancelled this week, but the opposition has been pressuring the prime minister to make a statement on it in parliament.

Most observers had earlier expected Modi to secure coal and insurance reforms this session because they enjoy rare bipartisan support.

"If the bills are not passed it will show badly on Modi's resolve on reforms," said U.R. Bhat, managing director at Dalton Capital, a unit of British-based investment management firm Dalton Strategic Partnership LLP that manages nearly $2 billion in assets.

The government did manage to introduce a bill for a common goods and services tax across the country on Friday. That will still need the support of two thirds of lawmakers in the next session and ratification by state legislatures before coming into effect.

Finance Minister Arun Jaitley later said the government wanted to roll out the new tax from April 1, 2016.

(Additional reporting by Abhishek Vishnoi, Krishna N. Das and Nigam Prusty; Editing by Sanjeev Miglani and Andrew Heavens)