Confederation of Indian Industry (CII) on Thursday welcomed the Union Cabinet's approval to the proposal to raise the foreign direct investment (FDI) cap in the insurance sector to 49 percent from the existing 26 percent.
"CII welcomes the Cabinet's approval to increase FDI limit in Insurance from 26 to 49 per cent with full Indian management and control, as it will help attracting the much needed long term capital for the sector which can have multiplier effect on the state of economy especially in meeting the huge infrastructure financing requirements", said CII Director General Chandrajit Banerjee.
"This has been a long standing demand of CII and therefore, CII recommends that the Insurance Laws (Amendment) Bill be taken on priority in the current session of parliament for passage", Banerjee added.
He further emphasized that capital infusion in the insurance sector, through greater FDI, would ensure innovations on product design and distribution, better risk management, introducing superior technology and greater investments.
"CII believes the end result will be sizeable improvement in the insurance penetration and density for the Indian economy which is considerably lower when compared with other emerging economies," said Banerjee.