Govt defers decision on Insurance Bill

Bowing to pressure from Trinamool Congress and other allies, the government, on Friday, postponed a decision on retaining the Foreign Direct Investment (FDI) limit in the insurance sector at 26 per cent as suggested by a Parliamentary committee.

Differences among ministers and reservations expressed by members of UPA allies over insurance sector reforms during the Cabinet meeting prompted the government to postpone the decision on the Insurance Laws (Amendment) Bill, 2008, sources said.

“What is the urgency...The consideration of the item has been postponed because 26 per cent foreign investment is already permitted,” Finance Minister Pranab Mukherjee told reporters after the Cabinet meeting.

Later, a senior Cabinet Minister, who was present in the meeting, said, “There was opposition from many ministers, including those belonging to allies.”

The Bill, which was tabled in Rajya Sabha in 2008, proposed to increase the FDI limit in the insurance sector to 49 per cent, but Parliamentary Standing Committee on Finance wanted it to be retained at the current level of 26 per cent.