Economy

Insurance Bill: Select panel tables report in Parliament

| Updated on: Dec 10, 2014

Pitches for 49% foreign investment cap

he Insurance Bill in the Rajya Sabha here on Wednesday.

While the Congress, BJP, BSP, AIADMK and Shiromani Akali Dal supported the Bill, the CPI(M), SP, JD(U) and Trinamool Congress submitted dissent notes to the report.

The Government is likely to bring the Bill for passage in the ongoing session.

The panel, headed by BJP leader Chandan Mitra, also submitted an amended Bill along with the report. The Bill has about a dozen amendments.

The committee has said in its report that increasing the foreign direct investment (FDI) limit will help domestic insurance companies.

“In view of the increasingly globalised economy and expanding global financial flows, involving liberalised foreign investment (including in India) in various fields like manufacturing, banking etc. for growth and development, the Committee is not in agreement with the argument of not increasing the cap in the insurance sector and goes with the provisions of the Bill to increase the foreign equity investment cap to 49 per cent, which would benefit the Indian insurance sector and facilitate it to meet its capital requirements,” the report said.

It suggested that all forms of foreign investment should be limited to 49 per cent. “The Committee recommends that the composite cap of 49 per cent should be inclusive of all forms of foreign direct investment and foreign portfolio investments. The Committee is also of the view that incremental equity should ideally be used for expansion of capital base so as to actually strengthen the insurance sector,” the report said.

The panel said the paid-up equity capital of ₹50 crore for health insurance should be increased to ₹100 crore.

Published on December 10, 2014

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