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| Politics
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| Insurance Bill: What You Need |
| Insurance Bill: What You Need to Know
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| INDIA
, 4-August-2014
8:25:46 AM |
| The Narendra Modi government is engaged in hectic efforts to secure enough support for its Insurance Bill to push it through Parliament in the current session. It is seen as the two-month-old government's first big reform as it attempts to boost a sluggish economy
The Insurance Laws (Amendment) Bill aims at raising the ceiling on foreign direct investment (FDI) in insurance to 49 per cent from the current 26 per cent limit.
2.The BJP-led NDA government proposes this will be a composite cap - which means that foreign capital can flow in either as direct investment or via the portfolio route, or as a combination of both. So foreign investors can either directly buy equity from the company or can buy shares on the stock market up to 49 per cent.
3.To allay fears that Indian entities may lose control, the bill provides that management must remain with Indian companies.
4.Also the approval of the Foreign Investment Promotion Board (FIPB) will be needed on any investment over 26 per cent.
5.Experts said a higher foreign direct investment limit in insurance could result in inflows of Rs. 40,000 crore to Rs. 60,000 crore over time, and immediate inflows of around Rs. 20,000 crore.
6.The government's effort to push the Bill in the current session has come up against a phalanx of Opposition parties, including the Congress, which have jointly asked the Rajya Sabha chairman to refer the bill to an all-party parliamentary panel called the select committee for review.
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