New Delhi: Paving the way for the long pending Insurance Bill to be placed in the Rajya Sabha, the Parliamentary Select Committee has given its recommendations on amendments to the Insurance Act that seek to raise foreign direct investment or FDI cap to 49 per cent.
Finance Minister Arun Jaitley said that he was hopeful that the insurance market expansion would take place once the Insurance Amendment Bill is passed by Parliament.
He was speaking at a meeting with British insurer Standard Life's chairman, Gerry Grimstone, and Kotak Group's chief, Uday Kotak.
"The Finance Minister expressed his sense of satisfaction as the Parliamentary Select Committee has given its recommendations with regard to the Insurance Amendment Bill referred to it," an official statement said.
It, however, did not spell out recommendations by the committee headed by senior BJP leader Chandan Mitra.
There was speculation that the report may contain a few dissent notes by Opposition members in the committee.
The term of the committee, set up in August, was last month extended by two more weeks till December 12 to submit its report.
The Bill proposes to raise the composite foreign investment ceiling (including FDI, FII and NRI) from 26 per cent to 49 per cent.
The approval to hike the FDI limit from the current 26 per cent, a proposal which has been pending since 2008, is expected to attract long-term capital, besides improving the overall investment climate.
There are about two dozen private sector insurance firms both in life and non-life segment.
Once the Insurance Bill is passed, the foreign investment ceiling in pension sector too would increase to 49 per cent.
In the Rajya Sabha, the ruling NDA does not have a majority and would require support from other parties for the passage of the legislation.
Mr Grimstone and Mr Kotak are co-chairs of the India UK Financial Partnership.
Mr Jaitely further said that insurance, banks, mutual funds and securities are among the areas of cooperation between India and the UK.
Mr Grimstone said there is great potential for foreign investment in India in various sectors including insurance, infrastructure and pension.
He further said that the UK corporate sector will play an important role in making the 'Make in India' programme a reality and success.
Earlier, the India-UK Financial Partnership was launched by the UK's Chancellor of the Exchequer and the Finance Minister of India to deepen financial services links between the two countries and to strengthen co-operation between London and Mumbai, among the world's leading financial centres.
The Partnership will focus on development of corporate bond market, mutual sharing of expertise on financial sector and market regulation, enhancing financial training and qualification and financial inclusion.
The focus will also be on cross-border provision of financial and insurance services, pensions, internationalisation of the Rupee and infrastructure funding.
The statement said, "The partnership is about deepening the links between the two countries' financial services industries."
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