FinMin offers cut-in-cap carrot to woo BJP vote on FDI

CNBC-TV18's Aakansha Sethi reports, quoting sources, that the government is contemplating to reduce the FDI cap in the Insurance Bill to 26 percent to persuade the BJP and parties in the Opposition to vote favourably towards the various Bills the government proposes to introduce in Parliament.

Also Read: Politicians must acknowledge economic crisis: Sardesai
Though the finance ministry is not too happy with reducing the FDI cap to 26 percent, it has explained that if it has to negotiate with the BJP on the enactment of the proposed FDI and other reform initiatives, then the reduction in the level of FDI is an option it is open to.
The Insurance Bill mandates several reforms that the government is keen on such as allowing the four general insurance companies to raise money from the capital markets, allowing a branch of a foreign company to become a reinsurer and boosting health insurance with reduced capital requirements and strengthening the Insurance Regulatory and Development Authority (IRDA).
However, the reduction in FDI will be determined by the result of government's negotiations with the BJP.