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Updated: October 7, 2012 22:54 IST

Hike in insurance FDI: Chidambaram to reach out to Opposition parties

Special Correspondent
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Union Finance Minister P. Chidambaram addresses a press conference in New Delhi. File photo
The Hindu Union Finance Minister P. Chidambaram addresses a press conference in New Delhi. File photo

Union Finance Minister P. Chidambaram, on Saturday, said he would convince the Opposition parties to back the government proposal on 49 per cent foreign direct investment (FDI) in the insurance sector.

“Most insurance companies promoted by public sector banks are in need of massive capital infusion. When the banks themselves are facing funds crunch for their own capitalisation, how can you expect them to pump in funds?” Mr. Chidambaram asked, while interacting with the media here.

Mr. Chidambaram informed presspersons that he would be discussing the issue with other political parties over the next few days. “I am quite confident of convincing them to back the proposal,” he added.

He met with financial regulators, including the Reserve Bank of India and the Securities and Exchange Board of India, investors, including the Association of Mutual Funds in India, and FIIs during his first visit here.

The Finance Minister stressed that the insurance sector needed huge money, and if the FDI limit was kept at 26 per cent, no additional funds would flow in. According to him, raising the FDI limit to 49 per cent would bring in foreign funds, which would benefit the domestic Indian insurance industry.

The Insurance Regulatory Development Authority and all insurance companies (life and general) had backed the 49 per cent FDI proposal, he added.

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This is a big mistake in our policy. FDI, now insurance and pension.
Any meltdown in the financial market around the world will put india
to the knees. The only reason we saved ourselves from two major
financial meltdowns was we were heavily invested by foreign funds, and
hedge funds. Now expect more corruption, and money going down the
tube. Greed for profit has taken over what is good for us. Our credit
system was so good, we used to give credit cards only for those who
put twice that amount in FDs etc...our pension were secured well. Now
with 3rd parties coming into the market only to make money, it is
going to be brutal coming years and recession will hit India.

from:  V.K.Mahendra
Posted on: Oct 6, 2012 at 22:23 IST

These bills are not in country's interest. It benefits only the affluent and has long term downside to fiscal health of the nation.It kills small business and harms local roadside poor vendors, which is their only livelihood. Insurance is an unnecessary product that corporations are marketing to take money out of common man's pocket. Then there will be health insurance, where desk clerks will start making decisions about your health needs. Money and power will be concentrated with top few rich people and MNC. There is a reason why MNC are pouring money into India, to make more at your cost, not with any good intentions. What happened to self-reliance and self-governance? Why can't money be raise within the country through Bonds and IPOs? Why can't we manage our own country? Don't we have affluent business houses in India? Why do we need to invite outsiders to take over India?

from:  Mishra
Posted on: Oct 6, 2012 at 19:19 IST
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