Hiking insurance FDI still contentious: FM

New Delhi, Nov 16 | Updated: Nov 17 2005, 05:30am hrs
Finance minister P Chidambaram said that the government is still awaiting the final recommendations from the Insurance Regulatory and Development Authority (Irda) for amending the Insurance Act.

He said that the government is still trying to iron out its differences with the Left parties on the issue of hiking foreign direct investment level in the sector to 49% from the current 26%. However, he pointed out that the government has already hiked the FDI limit in the other two sectors civil aviation and telecom.

We are talking to our Left allies on this and we hope that we can sort out the differences, Mr Chidambaram said at the economic editors conference on Wednesday. Meanwhile, he said that the government would go ahead with the required amendments in the Insurance Act.

The KP Narasimhan Committee has already sent its recommendations to the Irda, which now has to take a final call.

It may be noted that the finance minister had announced the hike of FDI limit in sectors like telecom, civil aviation and insurance while presenting Budget 2004-05.

On bank consolidation, the minister reiterated that the government would not initiate any mergers. Mr Chidambaram said that bank managements have been sensitised on the issue while the trade unions are being sensitised.

He also pointed out that enhancing the flow of credit to agriculture has been one of the main objectives of the government. The total disbursement by all lending agencies has been Rs 1,15,242.81 crore as on March 31, 2005, which means that the set target has already been met. This marked an overstepping of the target for the year by about 10%, the finance minister said.