Zee Media Bureau
New Delhi: The Union Cabinet meeting led by PM Narendra Modi on Thursday cleared the proposal to raise foreign direct investment (FDI) in the insurance sector from the current 26 percent to 49 percent.
The insurance bill is likely to be presented in Parliament after cabinet approval.
Minister for external affairs minister Sushma Swaraj was also present in the meeting.
Keen to raise the foreign investment limit to 49 percent in the insurance sector, the Finance Ministry had said that it will try to push the Bill to amend laws on this in the current session itself.
The proposal to raise FDI cap has been pending since 2008 when the previous UPA government came up with Insurance Laws (Amendment) Bill to hike foreign holding in insurance joint ventures to 49 percent from the existing 26 percent.
The insurance sector was opened up to the private sector in 2000 after the enactment of the Insurance Regulatory and Development Authority Act, 1999.
Since its opening up in 2000, the number of participants in the insurance industry has gone up from seven insurers -- Life Insurance Corporation of India (LIC), four public-sector general insurers, one specialised insurer, and the General Insurance Corporation (GIC) as the national re-insurer -- to 53 insurers as on March 31 2014 operating in the life, non-life, and re-insurance segments.
Barring the public sector insurance companies, all other insurance companies would benefit from higher FDI cap.
With PTI Inputs
First Published: Thursday, July 24, 2014, 09:42