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NEW DELHI : The Centre is close to finalizing the revised foreign direct investment (FDI) policy, which will facilitate the divestment of Life Insurance Corp. of India, Anurag Jain, secretary, department for promotion of industry and internal trade (DPIIT), said on Thursday.

The departments of divestment and financial services will decide on the percentage of foreign investment in LIC, before the changes are sent to the Union cabinet.

“The way our FDI policy reads as of now, it will cause a lot of issues for prospective investors, due to which it would be difficult to proceed with the disinvestment. We have had rounds of discussion and now we are all on the same page. So, we are in the process of drafting those changes in the FDI policy. Once we get cabinet approval, it will be known to all," he told reporters during a virtual press briefing.

The commerce and industry ministry will execute the revisions in the policy, he added.

The change will be an enabling mechanism to facilitate the disinvestment, such that it becomes a permissible activity.

According to the current FDI policy, 74% foreign investment is permitted under the automatic route in the insurance sector. However, these rules do not apply to LIC, which is administered through a separate LIC Act. Since the LIC Act has no provision for foreign investments, there is a need to align the proposed LIC IPO with Sebi norms regarding foreign investor participation.

The government is looking to bring the initial public offering of LIC by March, which is expected to be a mammoth 1 trillion issue, ministry officials said.

The Centre is also finalizing the e-commerce policy and the rough edges were being removed, Jain said, adding that the national retail trade policy will also soon be finalized.

In view of the surge in covid cases, and rising numbers of the Omicron strain of coronavirus and its impact on India’s economic activity, Jain said the third wave of covid-19 was unlikely to have an impact on growth with a five to 10 basis points  fall, as India was much better prepared with the vaccination rate picking up.

“We are much better prepared compared to the last wave... I have a feeling that there is nothing to be worried about. We are reasonably confident," he said.

He said medical oxygen supplies of nearly 19,000 tonnes were ready for deployment if the need arose.

Talking about the achievements in 2021, Jain said government-registered startups have created around 650,000 jobs with India becoming the third-largest startup ecosystem with more than 60,000 startups recognized by the DPIIT since 2016. The DPIIT aims to create two million new jobs in the sector by registering 50,000 new startups.

The department will also organize the Startup India Innovation Week from 10 January, which will feature innovative startups. Select startups will also be meeting Prime Minister Narendra Modi on 15 January, the DPIIT said.

PTI contributed to this story.

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