New Delhi: Undeterred by the political uncertainty over recent policy changes, the Congress-led United Progressive Alliance (UPA) government may press ahead with further measures to attract more investments.
The Union cabinet is likely to approve raising the foreign direct investment (FDI) limit in the insurance sector to 49% from 26%. According to a person familiar with the development, although FDI in insurance wasn’t listed on the agenda for the cabinet meeting on Friday, since deferred to 25 September, the issue is expected to come up at that meeting.
Media reports also said the cabinet committee on economic affairs (CCEA) would take up the issue of enhancing FDI in the pension sector as well. Mint could not independently confirm this.
The government wants FDI in the pension sector to be capped at the same level as in insurance.
The main opposition Bharatiya Janata Party, the Left parties as well as some of the parties that support the government are opposed to raising FDI in insurance and pension.
There’s also speculation that Prime Minister Manmohan Singh may reshuffle his cabinet, with the Trinamool Congress (TMC) withdrawing its support to the government. In order to safeguard its numbers in Parliament, the ruling UPA, which will turn into a minority government after the TMC’s withdrawal, may seek support from Andhra Pradesh lawmakers by granting statehood to Telangana.
According to a senior Congress leader, the party has decided to induct film star politician Chiranjeevi, whose Praja Rajyam Party had merged with the Congress, into the Union cabinet.
“The top leader also may give green signal for the merger of Telangana Rashtra Samithi (a party that was formed to agitate for Telangana) into the Congress,” said a party leader, who did not want to be identified.
PM to explain govt’s FDI decision today
Against the backdrop of widespread uproar over decision on FDI, Prime Minister Manmohan Singh is likely to explain to the nation on Friday the reason behind the step and the benefits it would entail. His explanation could be in the form of a written message or a televised address, sources said. PTI