Finance Minister P Chidambaram clears proposal of 49% FDI in insurance, pension sectors.

The proposal for 49% FDI in insurance and pension sector was put forward in May, i.e. during Pranab Mukherjee’s tenure at the finance minister office. However, the decision on the same was delayed because of resistance from the cronies.

The proposal needs to get Cabinet’s nod before being discussed in the Parliament. Hence, now when the current finance minister intends to go ahead with the bill, he will require putting forward the best of skills in order to get all allies together on board. Nevertheless, even if the Cabinet approves these bills now, chances that they may appear in Parliament’s monsoon session are very low. The monsoon session will conclude on August 27.

Besides demanding for a rise in the FDI limit in the sector, the insurance amendment bill also seeks to fortify regulation of the sector and let foreign re-insurers participate the Indian market. As per the Insurance Regulatory and Development Authority (IRDA) estimates, over the next five years, the insurance sector requires a capital infusion of moiré than $12 billion.

Source : yourmoneysite.com