FICCI TO PRESENT 10-POINT AGENDA ON FINANCIAL SECTOR REFORMS TO PM

New Delhi: Industry chamber Ficci will submit a 10-point comprehensive reform agenda (CRA) to Prime Minister Manmohan Singh this week. The agenda will focus on financial sector reforms including pension, insurance and banking. “These are the prime areas Ficci is planning to bring into focus through the 10-point agenda,” said Ficci secretary-general Amit Mitra.
“The Pension Fund Regulatory & Development Authority (PFRDA) Bill enables a framework, which can help create pensions for the unorganised sector and later include private sector participation in the pension sector, which has not been mentioned in the legislation otherwise,” said Mr Mitra. The PFRDA will help the average earners in the informal sector who are hitherto deprived of financial social security post retirement. The Bill is pending in Parliament despite the approval of the standing committee on finance.
Insurance is another sector that has been taken up by Ficci in its 10-point agenda. India opened its insurance market to the private sector in 1999 when Parliament passed a law establishing an independent regulatory body to oversee the insurance market. “In spite of this, India’s insurance market remains very small compared with some of the major emerging markets,” said Mitra.
India needs to raise the cap on foreign direct investment (FDI) to attract capital for the industry. The Insurance Laws Amendment Bill includes raising the cap on foreign stake in insurance firms to 49% from the current 26%.
“We have been pushing for the FDI cap to be raised to 49%. Many companies entered the Indian market with this expectation. India’s insurance industry needs capital, and a major source of capital would be from foreign investors, who are now limited to 26% ownership,” said Mr Mitra.

Source: The Economic Times