Insurance reforms to bring in foreign investment: industry

New Delhi: The government’s approval to key insurance and coal sector reforms will help attract much-needed investments, boost domestic manufacturing and usher in transparency and fair play, industry said today. CII Director General Chandrajit Banerjee said higher FDI in insurance “will help attract much-needed long term capital for the sector and would have multiplier effect on the state of economy, especially in meeting the huge infrastructure financing requirements. “Further, the long awaited reform will help create a conducive environment for reviving investments and sustaining growth in the Indian insurance industry,” he said.[caption id=“attachment_2011505” align=“alignnone” width=“380”]  Helping the insurance sector. Reuters[/caption] “The ordinance decision shows commitment and intent on part of the Government to get economic reforms through. It will boost industry sentiment and confidence,” PwC India Managing Consultant (Financial Services) Anuraag Sunder said. Sanjay Tripathy, HDFC Life Senior EVP – Marketing, Product, Digital and Ecommerce - said, “It’s a good move and shows that the government is serious about the Bill. After this move, Rs 8,000 crore foreign fund is likely to flow into the sector.” ICICI Lombard managing director and chief executive officer Bhargav Dasgupta said the move shows the government’s resolve to take the reforms agenda forward. The decision will bring in a lot of capital into the industry and boost the economy, SBI Life managing director and CEO Arijit Basu said. However, Assocham president Rana Kapoor said it would have been much better and more convincing to the investors if political consensus was reached on reforms and the Insurance Bill, urging political parties to come round to a common programme when it comes to key growth related issues. “Almost $8 billion is expected as FDI inflow in the insurance industry in India. With this increase in the limit of FDI, the Insurance sector, both Life and Non-Life, would have many additional private players in the ring,” Partner at Walker Chandiok & Co LLP Khushroo Panthaky said. A day after the conclusion of the Winter session of Parliament, the cabinet approved promulgation of the Ordinance on Insurance Bill, re-promulgation of the Coal Ordinance and allowing 100 percent FDI in medical devices in the pharmaceutical sector. Banerjee said the approval to 100 percent FDI for Medical Devices under the automatic route will meet a long standing need for local manufacturing and technology infusion in the sector which continues to meet the growing healthcare needs of a vast country like India largely through imports. Besides, her said the approval to an Ordinance to facilitate e-auction of coal blocks for private companies for captive use and allot mines directly to state and central PSUs reinforces the government’s resolve to kickstart the power sector reforms. PTI