Sunday, October 19, 2008

CABINET DEFERS DECISION ON FDI CAP IN INSURANCE

New Delhi: The Union Cabinet deferred a decision on the much-awaited insurance law amendment Bill that aims to raise the foreign direct investment (FDI) cap for insurance companies from 26 per cent to 49 per cent. No decision was taken as Finance Minister P Chidambaram was not present at the meeting.

The Insurance Laws (Amendment) Bill is expected to be tabled in the coming Parliament session, which begins on Friday. The Bill also seeks to allow promoters to hold majority stakes in insurance companies and permit public sector general insurance companies to raise capital from the market to finance their expansion.

The reforms, planned by the government long back, were put on the back-burner due to the opposition by the Left parties, which were giving outside support to the UPA government. The Bill is likely to be taken up by the Cabinet soon.

Briefing the media, Sibal said the Cabinet Committee of Economic Affairs (CCEA) approved the creation of institutional infrastructure for hospitality and tourism education. The approval would entail strengthening of existing hotel management and food craft institutes and result in creation of 19 new hotel management centres and 25 food craft institutes during the 11th Plan period (2007-12).

The CCEA also approved an incentive bonus of Rs 50 per quintal on paddy, over and above the minimum support price (MSP), for the entire kharif marketing season. The decision will effectively increase the support price of paddy procured for the central pool to Rs 900 per quintal, and partially address the concerns of farmers’ organisations, which were demanding a hike in the MSP.

Source: Asian Age, Business Standard

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