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He said more and more FDI is required in the sector to provide more coverage to
people of India.
Responding to questions posed by members, the Minister noted that in the
banking sector, the FDI cap was 74 per cent and wondered why it cannot be
increased in insurance sector.
Sinha cited the case of China and a number of other countries, saying they allow
higher foreign investment in insurance. We are well within our global
benchmarks, he said.
His reply was marked by a spat after he made certain comments which were
strongly objected to by oppostion members. The matter settled only after he
expressed an apology and said he had not intention to disrespect anyone but
was just pointing out factual errors.
Though the bill cleared the Lok Sabha hurdle with ease, the government will face
a tough task in getting it passed by the Rajya Sabha where it is in minority.
The insurance bill, introduced in Rajya Sabha in 2008, is already pending in that
House. When it was introduced in Lok Sabha yesterday, Left and TMC members
resisted, contending that the House has no legislative competence as similar bill
is pending in the RS.
A bid to withdraw it from the Upper House last week was scuttled by opposition.
The Bill seeks to raise foreign investment limit in the sector from 26 per cent to
49 per cent. While up to 26 per cent will be under the automatic route, the
remaining would be cleared through the FIPB.