The Finance Ministry has said that it is looking at other options in whichprivate insurance companies can be allowed to raise more fund without hiking Foreign Direct Investment (FDI) cap in the sector to 49 % from current 26 %.
Finance ministry said that now it will look afresh on the insurance sector. It will look at whether there could be some other instruments to permit insurance companies to raise funds without raising FDI cap.
Finance ministry also said that one option could be to raise the FDI limit in various insurance segments in a phased manner.
Bharatiya Janata Party (BJP) is oppose to raising FDI cap in insurance sector from current 26 % to 49 %. The proposal to hike FDI limit in the sector was mooted by United Progressive Alliance (UPA) government and is pending in parliament since 2008.
The Standing Committee on Finance headed by Yashwant Sinha has rejected the proposal to hike FDI cap in the sector. It was of the view that it may not have the desired effect and could expose the economy to global vulnerability.
vinay mohanty
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