Pranab Mukherjee said that, “We have committed to allow 49 per cent and the necessary legislation is pending before the House, as the leg process will be completed it will be done...in a year or so”.
As per the existing norms, a foreign player is not allowed to invest more than 26 per cent in a private sector insurance company.
The Insurance Amendment Bill, that will raise the FDI cap to 49 per cent, is pending before the Parliament since 2008.
The UPA government, in its budget speech on July 9, 2004 had promise to raise the FDI cap in Insurance but strong opposition from its Left allies had stalled any move from the government.
Higher foreign direct investment in the insurance sector will enable the industry to go public as all private insurers are making losses.
Most foreign partners have expressed willingness to raise shareholding in their joint ventures (JVs). Insurers like Bajaj Allianz had even fixed the price at which it would increase its stake.
