Union Government on Wednesday approved promulgation of the ordinance to hike foreign direct investment (FDI) cap in the insurance sector to 49 per cent from 26 per cent, as the legislation could not be passed in the Parliament session that ended on Tuesday.
"The Cabinet has cleared the ordinance on insurance sector," sources said after the meeting of the Union Cabinet headed by Prime Minister Narendra Modi here.
The Insurance Bill, which has been pending since 2008 in the Rajya Sabha, seeks to increase the composite foreign investment limit in insurance companies to 49 per cent from current level of 26 per cent.
“The passing of the ordinance is definitely a positive step and shows strong government intent for insurance reforms. However, actual FDI flows will depend on the legal technicalities of Ordinance versus Bill and the FIPB process.
For an industry that has a large 'on ground' infrastructure that combines branches, employees as well as agents at the grass root level, this could be the big 'shot in the arm' for the financial inclusion steps that the government has been driving,” said Deepak Mittal, MD & CEO, Edelweiss Tokio Life Insurance.
"The Cabinet has cleared the ordinance on insurance sector," sources said after the meeting of the Union Cabinet headed by Prime Minister Narendra Modi here.
The Insurance Bill, which has been pending since 2008 in the Rajya Sabha, seeks to increase the composite foreign investment limit in insurance companies to 49 per cent from current level of 26 per cent.
“The passing of the ordinance is definitely a positive step and shows strong government intent for insurance reforms. However, actual FDI flows will depend on the legal technicalities of Ordinance versus Bill and the FIPB process.
For an industry that has a large 'on ground' infrastructure that combines branches, employees as well as agents at the grass root level, this could be the big 'shot in the arm' for the financial inclusion steps that the government has been driving,” said Deepak Mittal, MD & CEO, Edelweiss Tokio Life Insurance.
