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'FDI needed for infrastructure'; PM, HM, FM cajole BJP on insurance bill

The Bharatiya Janata Party has finally resolved its differences over the controversial Insurance Regulatory Authority Bill and decided to wholeheartedly support it in Parliament.

The patch-up emerged after a marathon four-hour meeting of the central office bearers of the party at Prime Minister Atal Bihari Vajpayee's residence Monday night attended by the party president Kushabhau Thakre with his five general secretaries.

The meeting saw the party and the government debating the modalities as well pros and cons of the bill, which provides for 40 per cent foreign equity participation.

On Tuesday morning, the prime minister, Home Minister L K Advani and Finance Minister Yashwant Sinha explained at length the implications of the opening up of the insurance sector at the parliamentary party meeting of the BJP.

Parliamentary Affairs Minister Madan Lal Khurana said the decision to introduce the bill would be taken in a day or two.

Khurana said Advani informed the members of the parliamentary party that the country needed at least $ 25 billion every year to upgrade the infrastructure sector. This is only possible, if foreign investment is allowed in the insurance sector. Funds collected by private insurance companies could be utilised for the infrastructure sector.

Advani said that the present bill had been drafted with in-built safeguards unlike the one prepared by former finance minister P Chidambaram.

While there was no limit for foreign investors in the earlier bill, the bill proposed by the BJP government had fixed a ceiling of 26 per cent for foreign investors and another 14 per cent for NRI and other investors. Another feature of the bill is that dividend income will not be allowed to be repatriated to the foreign collaborator.

Khurana said that the government has decided to allow private participation in the insurance sector keeping in view changes in the world economy and as a part of continuation of economic reforms.

UNI

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