New Delhi: The group of ministers (GoM) meeting for finalizing the insurance law amendments that the Centre plans to introduce in the forthcoming budget session of Parliament, is scheduled to meet on Tuesday.
The meeting is expected to discuss two key changes to insurance laws—hiking total foreign shareholding in Indian companies to 49% from the current level of 26%, and arming the Insurance Regulatory and Development Authority with the power to decide on the pattern foreign investment.
The finance minister had announced the aim to hike the foreign shareholding cap to 49% in 2004, but the relevant law could not be amended as the Left parties opposed the move.
The government also plans to change the pattern of foreign investment in insurance companies. A government official said a section in the finance ministry favoured relaxing the cap of allowing a foreign institutional investor (FII) to pick up only 5% stake. “The present norms allow a consortium of FIIs to pick up to 10%. There is a view that a single FII should be allowed to pick up to 10%,” the official added.