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New Delhi: At a time when the government is struggling hard to hike the FDI cap to 49 per cent in insurance, the Economic Survey asked for raising the limit on foreign equity to 100 per cent in specialised segments like health and weather insurance.
"Raise foreign equity share in insurance to 49 per cent. In addition, consider allowing 100 per cent foreign equity in a special category of insurance companies that provide all types of insurance (e.g. health, weather) to rural residents and for all agriculture-related activities including ago-processing," said the Survey, tabled in Parliament.
This may help dispel fears of foreign equity in insurance, it said.
The government earlier had proposed raising the FDI cap in its Budget in 2004-05. However, opposition from the Left parties eluded consensus on the issue.
Following the break-up with the Left, the government tabled the Insurance Laws (Amendment) Bill, 2008, in the Rajya Sabha. Subsequently, it was referred to the Standing Committee.
However, the Survey noted that since the opening up, the number of participants in the sector has gone up from six in 2000 to 44 insurers operating in the life, non-life and reinsurance segments as in March 2009.
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