Insurance FDI may hit Rs 50K crore

India’s creaking infrastructure sector will get a leg up, job prospects will brighten and to top it all, the consumer will get a better return on insurance products after the government’s decision to throw open the country’s insurance sector to global insurers in a bigger way.

The FDI limit in the insurance sector was increased to 49 per cent from the existing 26 per cent after the Parliament voted in favour of a legislation languishing for the past six years.

“Around 15 per cent of the total investment coming in the sector will be channalised to infrastructure sector,” Minister of State for Finance Jayant Sinha said in Parliament.

According to estimates, foreign companies are waiting in wings with at least Rs 50,000 crore to be invested in the insurance sector of the country which has a growing middle-class population with increasing purchasing power.

India’s insurable population is expected to touch 75 crore by 2020. With this, the scope of insurance in financial planning is set to increase. A favourable demography and awareness of people make the prospects of the insurance business look better. With 52 insurance companies, insurance sector is one of the largest in the world in terms of volume of money involved. Yet only about 25 per cent of people have general insurance cover.