'Increasing FDI in insurance high on priority'

 Increasing foreign direct investment (FDI) in insurance sector is top priority for the government Finance Minister P Chidambaram said on Saturday, hoping that a Bill to address the issue will be passed in the upcoming Parliament session.

Responding to questions at the Peterson Institute, Chidambaram appreciated efforts of the insurance industry in reaching out to the opposition parties and hoped that this would help the political parties understand the issues and thus help in the passage of the Bill.

“It (insurance FDI) is right there in top of the agenda. We are stuck on one clause, FDI cap whether it should be 26 or raised to 49. If the principle opposition party comes around, the bill will be passed,” Chidambaram said.

“I am keeping my fingers crossed. I sincerely hope that the efforts of the insurance industry in speaking to the opposition will be helpful and I can pass the bill,” he added.
Noting that without growth there will be neither inclusiveness nor development, he said, “Once you accept that paradigm, you have to accept fiscal deficit, you have to contain inflation, you have to contain expenditure, you have to balance your books to a large extent.”

BRICS Bank

The five BRICS nations hope to complete preparations for their proposed joint development bank by their 2014 summit in Brazil, Chidambaram said. "Before we go to Brazil for the next summit, that is one year from Durban, we hope to complete our homework," he said in remarks at the Peterson Institute in Washington.

The emerging powers group - Brazil, Russia, India, China and South Africa - announced last month at a summit in Durban, South Africa their intention to set up their own development bank to reduce their reliance on Western financial institutions. "The BRICS finance ministers met in Washington and we reiterated our commitment to the BRICS bank," said Chidambaram.

He said officials from the five countries - who represent a fifth of global Gross Domestic Product and have high geopolitical importance in their separate regions - would refine the plan and work out technical details for leaders to sign next year in Brazil.

Questions of where the bank will be located and respective contributions of member countries would be made by the leaders, said Chidambaram.

"We hope that we can complete our work in 12 months," he said. "It's an ambitious agenda, but we are going to work hard on that (matter)."