Insurance Bill likely in current session: Govt
New Delhi: The government is likely to introduce amendments to the Insurance Bill in the current session for raising FDI cap in private sector insurance companies to 49 percent, Parliament was informed on Friday.
"...The official amendments to the (Insurance) Bill is likely to be introduced in the current session of Parliament. The foreign equity cap is being raised in order to meet the growing capital requirement of the insurance companies," Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha.
The Bill, which has been pending in the Rajya Sabha since December 2008, provides for raising FDI cap in private sector insurance companies from 25 percent to 49 percent.
The decision to hike FDI cap had already been approved by the Union Cabinet, Meena said, adding "the foreign equity cap is being raised in order to meet the growing capital requirement of the insurance companies."
The Standing Committee on Finance, it may be recalled, in its report had opined against raising the FDI cap to 49 percent arguing that it would expose the sector to global vulnerability.
Insurance Regulatory and Development Authority (IRDA) has favoured increase in foreign direct investment in the sector to 49 percent, saying the decision would help the sector in raising funds which are needed for growth.
There are over two dozen private sector insurance companies operating in India in life and non-life sectors.