Chidu Approves Proposal of 49 Percent FDI in Insurance, Pension Sectors

In the Parliament on December 2008, the Insurance laws (amendment) bill was introduced by the government in order to modernize the sector law and increase the foreign participation in the sector.The union cabinet had to postpone their decision on these bills when Pranab Mukherjee was the Finance Minister because of opposition from the Trinamool Congress in spite of the low FDI limit of 26 percent.

Yashwant Sinha,  Senior Member of Bharatiya Janata Party (BJP) while heading the Parliamentary committee showed inconvenience in raising the FDI capitalization on the sector, saying the move will amount to giving control of the country's robust financial sector to foreigners.

It was suspected that by increasing the input of foreign capital, may lead to the possibility of exposing the economy to the vulnerabilities of the global market which can also be endanger interest of the policy holders. However, the panel, headed by Sinha, had agreed on the need to bring in comprehensive changes in the outmoded laws governing the insurance sector.

(With Agency Inputs)