Finance minister P Chidambaram has cleared a proposal to raise foreign direct investment limit in insurance and pension sectors to 49%.Â The insurance amendment bill was pending since long and with the clearance from finance ministry the insurance industry which was slowing down will get a major boost.
The bill to come into force will have to be passed by parliament in next session. The UPA government is breathing easy after the exit of Mamta Banerjee and has outlined slew of measures to bring back the economy onto track. The Indian economy was passing through a rough phase and the business sentiments were also at its bottom.Â It will not be easy for the UPA government to get the bills passed with thumping majority in the parliament with the position of Mamta, left and other opposition parties.
The government had introduced the Insurance Laws (amendment) bill, 2008 in Parliament in December 2008 to update the sector law and increase the foreign participation in the sector.Â
Senior BJP leader and former finance minister Yashwant Sinha headed standing committee on finance has in its recommendation on the bill not favoured an increase in FDI limit. In fact, it had recommended that the bill expressly cap FDI in the sector at 26%, implying that the legislation will not have an easy passage in Parliament.