The Indian government is set to push for a second round of big-ticket reforms on foreign direct investments (FDI) in the insurance and pension sectors, signalling the UPA's hope for a complete turnaround of the economy amid much opposition from political parties across the country.
On Wednesday, a government minister announced that the Union Cabinet will consider raising the FDI limit in the insurance sector to 49 percent and allowing 26 percent FDI in the pension space.
Foreign insurers have long expressed the desire to enter the pension sector and have been lobbying hard for more flexibility in the insurance sector, where the investment limit stood at 26 percent. Clearing of the pensions bill would give global financial firms access to India's pension fund market worth ₹15.4 lakh crore.
The agenda of Thursday's meeting at 4:30 pm will also include the proposals to set up a National Investment Board to provide quick clearances for mega projects and to accord Forward Markets Commission with greater financial power.
Should the Cabinet approve the proposed reforms, then the bills will be presented in the Parliament for approval before becoming law.
Officials at the meeting may also consider approving the 12th Five-Year Plan policy document that seeks to lower annual average economic growth rate to 8.2 percent from the earlier 9 percent during the between the period 2012 and 2017, Press Trust of India said.
The second wave of proposed FDI measures came less than a month after the government approved controversial reforms in allowing 51 percent FDI in the multi-brand retail sector, 49 percent FDI in aviation firms, a diesel hike price, raising the cap of subsidised cooking gas as well as more flexibility of FDI in the broadcasting sector.
The first set of reforms announced on Sept 13 triggered massive protests particularly from the Opposition-led parties who called for an immediate rollback and the pullout of Trinamool Congress party (TMC), UPA'S biggest ally.