The Finance Ministry is pushing hard for increasing the foreign direct investment (FDI) limit in the insurance sector to 49 per cent. The Cabinet is expected to take up this proposal soon, a senior Government official said on Wednesday. At present, the FDI limit in insurance sector is 26 per cent.

This indication comes at a time when senior Ministers have admitted that it would be difficult to get the legislation approved in Parliament as the government does not have the numbers in the Upper House.

“The Finance Minister is keen on getting Cabinet approval on raising FDI cap in insurance sector. It should go to the Cabinet soon,” a Ministry official said. Any proposal for increasing the FDI limit will be against the suggestion given by the Standing Committee on Finance, which suggested status quo on FDI limit in the Insurance Bill, which was tabled in the Rajya Sabha in 2008.

However, with the Government speeding up policy measures, the expectation is building up for the insurance sector. Since such a move requires number management in Parliament, the Government is assessing the political implications of the move, sources said. Earlier, in May, the Cabinet had deferred the proposal to hike FDI limit in insurance.

Meanwhile, Finance Minister P. Chidambaram discussed possible measures for development of the insurance sector with Insurance Regulatory and Development Authority Chairman J. Hari Narayan on Wednesday. The meeting dealt with issues relating to increasing insurance penetration and how insurance companies can do more business and how better products can be introduced to lower premium.