New Delhi: Indian government on Thursday raised the
cap on foreign direct investment in insurance from 26 per cent to 49 per cent,
and opened pension sector to foreign investors by allowing 26 per cent
FDI.
This has come after the government announcement
in September to open the Indian’s massive retail sector market for foreign supermarkets.
The one by one big bang reforms are seen as
a crucial part of efforts to boost a slowing economy.
Already facing criticism from the Bhartiya
Janata Party (BJP), the major opposition party in Indian parliament, Congress-led
UPA government could face opposition even from its stalwart allies with the
move to liberalize the industrial sector.
Notably, the
government also has announced a 14% rise in the price of diesel, which is
heavily subsidised in India, and reduced the subsidy on cooking gas cylinders.
Opposing the move opponents
have said the measures would hurt the poor.
The Union Cabinet on
Thursday approved the insurance amendment bill, which proposes raising the
level of foreign investment allowed in the insurance sector to 49%, from the
current 26%.
The cabinet also
cleared up to 26% foreign investment in pension companies - a sector so far
closed to foreign investment.