We will hold meetings with finance ministry officials on the same, we want the government to increase the FDI limit to 49 per cent at the earliest, said a Ficci official, adding that the issue has been long pending.
Sources also said that foreign investment was key for the growth of the sector. Sources added that most of the foreign players would immediately increase their stake in their respective insurance companies once the cap is increased. New York Life of Max New York Life and Aviva of Aviva Life Insurance Company have already expressed their eagerness to increase their stake to the maximum permitted level.
Meanwhile, official sources told FE that the government would look into the issue of increasing the FDI limit. We will look into the issue and a decision will be taken only after weighing all pros and cons, a senior government official said.
Sources also said the ambiguity in the legal framework pertaining to this sector has hindered its growth.
Earlier the NDA government was also toying with the idea of divesting stakes of Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). However, the new government has underlined in its Common Minimum Programme that LIC and GIC will continue to be in the public sector and will continue to play their social role.
It may be noted that the FDI cap in the banking sector had been increased to 74 per cent last year by the NDA government. However, the voting rights had been left unchanged at 10 per cent.