FDI cap in insurance raised to 49%; foreign investment in pension sector allowed; new Companies Bill 2011 cleared
Notwithstanding the strong opposition to its reforms agenda, the Manmohan Singh government on Thursday pressed ahead with more big-ticket reforms, raising the FDI cap in the insurance sector to 49 per cent, opening up the pension sector for foreign investment and clearing the Companies Bill, 2011. It also approved amendments to the Competition Act, 2002, and the Foreign Contracts (Regulation) Amendment Bill, 2010.
To give a push to the infrastructure sector, the Cabinet also cleared a tripartite agreement for Infrastructure Debt Fund (IDF), the 12th Five Year Plan document and granted international airport status to the Lucknow, Varanasi, Tiruchi, Mangalore and Coimbatore airports.
The tripartite agreement is among the developer, the lender (bank) and the IDF. Loans will be refinanced by the IDF so that banks could have free funds for more lending. The IDF, proposed in the Union budget for 2011-12, is aimed at accelerating and enhancing the flow of long-term credit for funding infrastructure development.
However, the government could run into trouble as the Pension Fund Regulatory and Development Authority Bill, 2011, and the Insurance Laws (Amendment) Bill, 2008, which have been pending in the Rajya Sabha, could face a stiff opposition in Parliament.
The Cabinet, at a meeting presided over by Prime Minister Manmohan Singh, decided to raise the cap on FDI in insurance from 26 per cent to 49 per cent, citing the growing capital requirements of capital insurance companies. The sector needed $12-billion worth of investments, which could come off only if the FDI limit was raised, the government argued.
The Cabinet also approved certain amendments to the Pension Fund Regulatory and Development Authority Bill. “These amendments have been necessitated in view of the recommendations of the Standing Committee on Finance, which has examined the Bill. The government has decided to accept five key recommendations,” an official release said. Though the cap on FDI in the pension sector has not been announced, Finance Minister P. Chidambaram said it would be of the same order of 49 per cent as in the insurance sector.
The Cabinet approved the Forward Contract Regulation Act (Amendment) Bill, which seeks to give more powers to the Forward Markets Commission (FMC), the commodity markets regulator. It will strengthen the FMC by providing it with financial autonomy, facilitate the entry of institutional investors and introduce new products for trading such as options and indices.
The Cabinet gave the green signal for further amending the Competition Act 2002, so as to meet the present-day needs in competition, in the light of the experience gained from the working of the Competition Commission of India in the past few years.
The Companies Bill, 2011, meant to ensure the growth and regulation of the corporate sector, was also approved.
Keywords: Union Cabinet, Manmohan Singh, reforms, FCRA Bill, insurance sector, P. Chidambaram, foreign direct investment, Planning Commission, 12th Five Year Plan
And finally.. they came after the pensions as well...
But I guess India won't be silent...
India is on sale. While 30 Crore Indians have just one square meal a
day. 30 crore is a very small number for Congress.Congress is cheating
and swindling in Arabs , that is 10,00,00,00,000.Ten zeros.Number 10
rings a bell?
Steps taken in the national interest for the progress of the country are always welcome.In view of the stalemate in parliament,many important decisions could not be taken.The decisions taken now,need to be properly discussed and duly ratified by the parliament after filtering
The importance of regulatory environment can't be overemphasized. It is
also equally important that the judicial or arbitration authorities also
be reformed quickly.
India is again going back to hands of foreigners ,again we may need to do freedom struggle .
FDI is the form of direct access/control on India economy for foreigners/foreign countries .
Using this FDI weapon they(foreigners) can control India and can take India into their control for rulling it.
**Foreigners may give better governance and development then Indian politicians
India's Constitution is not changing in right direction (only good things in books have been changing and bad things are more enhanced like reservation )
Come on West, come and have a feel of what actual hardcore corruption is like! You will enjoy your investment term! Have a great time with our billionaire politicians! They will mentor on how to become a billionaire in 6 months!
The cartoon in your paper today is more eloquent a comment! It
shows:-
That water comes wee bit too late as the plant is withering!
That the plant stands unprotected in wilderness,which is true of
our
economy.
That tankful of water will mean absolute waste,and lead to
rotting
of the plant.
That mere water will not be enough! Plant needs good fertiliser
to help it grow strong!
It may be a brave move given its numbers in the Parliament.I think the Government is banking on the opposition party(BJP) for the passage of this bill.
Also we should hope that the Government exercise considerable regulatory control over both these insurance and pension sector to make it reliable and frutiful to the general public.
Proposed reforms are being debated for their economic and social
impacts. But little is being discussed about the dangers of
unregulated capitalism.
Lack of adequate regulation of the financial sector ruined the
economies of US, UK and Europe - and the common man is paying the
price in unemployment, poor schools/hospitals etc - and may suffer for
another decade!! Now these countries are tightening up their
regulations and regulatory mechanisms.
India suffers from (i) very poor regulation of its corporate,
financial, in fact probably all sectors, (ii) alleged nexus between
the executive, the legislature, the judiciary and the corporate sector
(iii) alleged subversion of democratic checks and balances (iv) poor
governance (v) mass of uneducated voters, etc.
So, unless the detailed terms of FDI and FI are closely scrutinised
and robust "latest western-style anti-exploitation/anti-corruption
regulations" are PUT IN FIRST, Indians may suffer a worse fate than
those in the West. Beware!
Sensex, whatever that means, up like prices. Whom the reforms would please?
Irrespective of the opposition from both ruling and oppsition parties, Manmohan Singh audaciously carrying on his reforms deaclaring spree in his bid to create an ECONOMIC BUBBLE just before election. There by he hopes he can effectively deviate people's attention from all the scams and get it concentrated on the booming economy. As it is only a year and few months to go before the next general election people don't get any chance to evaluate the long term impacts of his reforms.
Going by the record of the Government in handling cream-laden dishes (schemes
dripping with corruption-honey), one shudders to think of the consequences, if
things are deviously handled. Let us hope good sense will prevail.
Finally the government is showing some spine. Hope they carry on with
more reforms.
It looks as if the UPA is playing its slog overs as the innings ends.
Is Dr Manmohan Singh led government represnting India and its people foreign financial corporations guided by forces staioned outside India?
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