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Insurance Bill: Congress likely to support the bill in RS

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New Delhi (Dec. 02, 2014): Government is likely to get a favourable view from a Parliamentary panel scrutinising the Insurance Bill that proposes raising foreign investment cap to 49 per cent, after Congress agreed on most provisions except allowing FIIs.

The Select Committee on the Insurance Laws (Amendment) Bill, 2008 headed by BJP's Chandan Mitra today met to discuss various aspects of the legislation. SP and BSP stayed away from the meeting, while TMC staged a protest walkout.

The 15-member panel would meet again tomorrow and is likely to finalise a draft report by Monday, sources said. The panel has been asked to submit its final report by December 12 to Rajya Sabha.

At the meeting today the committee deliberated on almost half of the over 110 clauses in the Bill, they said, adding the AIADMK appeared toeing the Left party line which is opposed to allowing FDI in the insurance sector.

Naveen Patnaik's BJD and Independent MP Rajeev Chandrasekhar were in favour of government's stand on the issue, sources said.

Finance Ministry Arun Jaitley recently had said efforts were on to take up the long pending bill in the ongoing Winter Session.

The Bill proposes to raise the composite foreign investment ceiling (including FDI, FII and NRI) from 26 per cent to 49 per cent.

Sources said Congress wants only foreign direct investment (FDI) should be allowed in the insurance.

In Rajya Sabha, the ruling NDA does not have majority and would require support from other parties for passage of the legislation.

The approval to hike the FDI limit from the current 26 per cent, a proposal which has been pending since 2008, is expected to attract long term capital, besides improving the overall investment climate.

There are about two dozen private sector insurance firms both in life and non-life segment.

Once the Insurance Bill is passed, the foreign investment ceiling in pension sector too would increase to 49 per cent.