Chambers, Firms Hail...

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[The government's decision to table a bill in Parliament to hike foreign direct investment (FDI )cap in private insurance firms was today hailed by industry chambers and insurers as a move to bring in much needed capital in the sector. &quot;The insurance sector being a capital intensive sector requires huge investments over a prolonged period of time, and therefore, there is constant need for capital infusion. Click On Govt Pushing Ahead On Insurance FDI Reform &quot;A hike in the sectoral FDI cap to 49 per cent would further grow the insurance sector and bring in much needed FDI to the country,&quot; MetLife India Insurance's Managing Director Rajesh Relan said in a statement. Confederation of Indian Industries, termed the bill as a much-awaited one, and said, that this bill &quot;would further help in development of the insurance sector&quot;. The industry body, which had played an active role in preparing the draft bill, hoped that it would find a quick and easy passage in Parliament. MetLife's Relan said allowing more FDI would help achieve &quot;increased coverage to the rural and social sectors, thereby providing protection and peace of mind to the people... Also increase employment, develop tertiary sectors such as IT/ITeS and provide long-term investments for developing infrastructure...&quot; Ficci said, &quot;We now hope that the bill would be cleared in Parliament and thereby provide an impetus for further growth of the insurance sector in the country.&quot; The Union Cabinet, at a meeting yesterday, approved to table a comprehensive insurance bill, which among others, proposes to increase FDI cap in the sector to 49 per cent from 26 per cent now. Informing about the decision, Finance Minister P Chidambaram today told reporters that the clause to raise the FDI cap applies only to private insurers and not public sector insurance companies. &quot;Let me make this very clear...This does not apply to public sector insurance companies, which are 100 per cent government owned. But there are a large number of private sector insurance companies where foreign partners can now hold up to 26 per cent. The proposal is they can go up to 49 per cent,&quot; he said. Managing Director and CEO-designate of private insurer Aviva India, T R Ramachandran, said, &quot;A simple calculation shows that raising the FDI limit to 49 per cent may increase the total FDI in the life insurance industry by almost 2.5 times from the current levels of around Rs 2,500 crore.&quot; &quot;We are happy as increase in FDI cap in the private sector insurance companies will benefit the industry as a whole,&quot; said Reliance Life Insurance CEO P Nandagopal even though the firm does not have any FDI. Another industry body PHDCCI said the new proposal would encourage several foreign insurance companies to enter the Indian market and contribute to strengthening of the sector. However, CPI-M said the move would be counter-productive and vastly enlarge India's vulnerability to international speculators. (PTI)