BJP, Congress agree on raining FDI cap in insurance

The BJP and Congress seem to be finally in sync on raising the FDI cap in insurance sector. The story began during the previous NDA regime which proposed raising the cap to 49% but with the Opposition resisting it, the limit was restricted to 26%. During the UPA regime, attempts by the finance minister to raise the cap were opposed by the BJP.

The Standing Committee on finance headed by BJP's Yashwant Sinha, a former finance minister, was of the view that FDI should be limited to 26% in the financial sector.

"The Standing Committee, a multi-party panel, took a holistic view about the entire financial sector (banking, pension and insurance) and felt that FDI should be restricted at 26% and in case it was allowed to go beyond that then as in banking the voting rights should be capped at 26%," Sinha said.

Finance minister Arun Jaitley had said in his budget speech on Thursday that the insurance sector was investment-starved and there was need to increase the composite cap in it to 49%, with full Indian management and control through the FIPB route.

To a question on change in BJP's stand on FDI in insurance sector, union minister Ravi Shankar Prasad said "I was a member of the standing committee. We had concerns about it but were never opposed to it in principal."

The Congress, however, indicated its support on the proposal to raise FDI limit in insurance. "We, unlike NDA, do not change stance when we are in government. We will stand by (it) provided every clause in it is for the benefit of the common man," party leader Jyotiraditya Scindia said.