Insurance Bill fate hangs in balance
by Mahua Venkatesh
NEW DELHI, APR 6: The group of ministers on insurance may not be able to come up with its final recommendations within the current Budget Session of Parliament. Official sources said that the GoM, headed by external affairs minister Pranab Mukherjee, was likely to take a few more sittings before it draws its conclusions. The GoM has todate, only met twice. The Bill for a comprehensive amendment of the insurance sector was slated to be taken up during the Budget Session.
The primary objective of the GoM now is to convince the Left parties on the need to raise the foreign direct investment in the sector to 49% from the current 26%. In fact, in the last meeting the GoM tried to garner support of the Left allies.
“We are now expecting the Left parties to get back with their observations and queries on the FDI issue, which would be then taken up for discussions during the next couple of meetings,” a source said.
The uncertainty on the issue of hiking FDI has become a cause of concern for the insurance companies. Sources within the industry said that the insurance business is capital intensive and fresh capital would required for further expansion and to break even.
Besides the amendment to the Insurance Act, other reforms in the financial sector relating to raising the voting rights of foreign stakeholders in private banks, pension Bill among others are also pending.
Source: The Financial Express April 07, 2007
by Mahua Venkatesh
NEW DELHI, APR 6: The group of ministers on insurance may not be able to come up with its final recommendations within the current Budget Session of Parliament. Official sources said that the GoM, headed by external affairs minister Pranab Mukherjee, was likely to take a few more sittings before it draws its conclusions. The GoM has todate, only met twice. The Bill for a comprehensive amendment of the insurance sector was slated to be taken up during the Budget Session.
The primary objective of the GoM now is to convince the Left parties on the need to raise the foreign direct investment in the sector to 49% from the current 26%. In fact, in the last meeting the GoM tried to garner support of the Left allies.
“We are now expecting the Left parties to get back with their observations and queries on the FDI issue, which would be then taken up for discussions during the next couple of meetings,” a source said.
The uncertainty on the issue of hiking FDI has become a cause of concern for the insurance companies. Sources within the industry said that the insurance business is capital intensive and fresh capital would required for further expansion and to break even.
Besides the amendment to the Insurance Act, other reforms in the financial sector relating to raising the voting rights of foreign stakeholders in private banks, pension Bill among others are also pending.
Source: The Financial Express April 07, 2007
