FM confident insurance, pension bills will be passed

FM confident insurance, pension bills will be passed Mumbai: Promising more reforms, Finance Minister P Chidambaram on Saturday expressed confidence that the bills on FDI in insurance and pension will be passed in Parliament for which he will soon open dialogue with the opposition parties including the BJP.

"There is a difference of opinion (on the issue of 49 percent FDI in insurance). I intend to meet with the leaders of opposition and convince them. I can convince the opposition parties that this clause (of raising the FDI cap) can be kept," he told a press conference on his first visit to the financial capital after taking over as Finance Minister.

The Minister said that he was convinced that the two amendment bills crucial for the economy bills will be passed by Parliament and sought media's cooperation in this regard.

Asked by a reporter as to whether there would be more reforms after the second instalment that was announced during the week, he said, "I don't know why you are saying this is second instalment. There will be more. There will be more issues to be addressed. There will be more."

Earlier in the day, Chidambaram met RBI Governor D Subbarao and other top functionaries of the central bank, members of the Sebi board and representatives of mutual funds and financial institutions.

On the Insurance Bill amendment cleared by cabinet, he said, the government had accepted a vast majority of recommendations of the Standing Committee on Finance which, however, suggested that the FDI cap be retained at 26 percent.

After consulting Insurance Regulatory and Development Authority (IRDA) and market players, the government has come to the conclusion to raise it to 49 percent.

"So there is a difference of opinion on that. I would have to do my best to convince the principal opposition party as well as the other opposition parties that it is in the best interest of the insurance industry and the people of the country that we must raise the FDI cap from 26 to 49 percent.

"I intend to do just that. I intend to meet the leaders of the opposition and convince them. I am confident that I can", he said.

The Minister said if the cap is kept at 26 percent, no extra capital will flow into the country. The entire additional capital will have to be funded by Indian partners who have said that they don't have that kind of capital.

"The only way additional capital will come is if you raise the cap to 49 percent so that foreign partner can bring in more capital," he said.

Chidambaram said all insurance companies have supported the IRDA proposal for raising the cap to 49 percent.