Insurance FDI cap raised to 49%

Insurance FDI cap raised to 49%

 In a departure from the past, the BJP-led government on Thursday made its intentions clear to raise foreign direct investment cap in the insurance sector to 49 per cent from the current 26 per cent and promised to bring a bill in Parliament soon to this effect

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Finance Minister Arun Jaitley’s maiden Budget for 2014-15 also proposed to raise composite FDI cap in the insurance sector.

“Insurance sector is investment starved. Several segments of the insurance sector need expansion. The composite cap in the sector is proposed to be increased up to 49 per cent from the current 26 per cent, with full Indian management and control, through the FIPB route,” Jaitley said.

The composite cap refers to clubbing of foreign investment by strategic and portfolio investors.

The Insurance Laws (Amendment) Bill has been pending in Parliament since 2008. While the BJP extended its support to the previous UPA regime in passage of the Pension Fund Regulatory Authority Bill last year, it said a categorical no to the insurance cap being raised to 49 per cent.

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