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Oct 04, 2012, 07.40 PM IST
The cabinet has cleared 49% foreign direct investment (FDI) in insurance and pension, reports CNBC-TV18. Currently, no foreign investment is allowed in the pension sector and only 26 percent FDI is allowed in insurance.
In addition, the cabinet has also approved the Companies Bill, 2011 .
Cheering up the move, Nageswara Rao, MD & CEO, IDBI Federal Life says that it will ensure greater flow of capital into the industry and attract foreign investors to increase their stake.
Echoing a similar sentiment, Deepak Sood, MD & CEO, Future Generali adds that it will have a positive impact on the customer confidence.
The move on FDI in pension and insurance will need Parliamentary ratification as they are governed by an act of law and not an executive domain. Meanwhile, Yashwant Sinha panel will scrutinise both Insurance & Pension Bills and will wait for the govt to introduce them in Parliament.
Earlier in June this year, the government had made an attempt to push the nine-year-old Pension Fund Regulatory and Development Authority Bill. The bill which seeks to give statutory status to the pension regulator was put on hold due to the Presidential elections.
This is the second wave of reforms decisions to be undertaken by the government within a month. On September 13, the government had approved the decision of allowing 51 per cent FDI in multi-brand retail, besides relaxing FDI norms for civil aviation and broadcasting sector.
The decision on FDI in retail triggered a major uproar, with some allies and opposition parties launching a massive attack on the government. Trinamool Congress even withdrew support to the government. The Cabinet is also expected to approve 12th Plan and accord international status to five airports.
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