Mumbai, Oct 7 (PTI) : Finance Minister P Chidambaram on Saturday expressed confidence that the Bills on foreign direct investment (FDI) in insurance and pension will be passed in Parliament, and said he will soon open dialogue with the Opposition parties including the Bharatiya Janata Party.
“There is a difference of opinion (on the issue of 49 per cent FDI in insurance). I intend to meet with the leaders of Opposition and convince them. I can convince the Opposition parties that this clause (of raising the FDI cap) can be kept,” he told a press conference on his first visit to the financial capital after taking over as Finance Minister.
The Minister said that he was confident that the two amendment Bills will be passed by Parliament and sought the media's cooperation.
Asked by a reporter as to whether there would be more reforms after the second instalment that was announced during the week, he said, “I don't know why you are saying this is second instalment. There will be more. There will be more issues to be addressed. There will be more.”
Earlier in the day, Chidambaram met the governor of the Reserve Bank of India, D Subbarao, and other top functionaries of the central bank as well as the Securities and Exchange Board of India, and representatives of mutual funds and financial institutions.
On the Insurance Bill amendment cleared by the Cabinet, he said, the government had accepted a vast majority of recommendations of the Standing Committee on Finance, which, however, had suggested that the FDI limit be retained at 26 per cent.
After consulting the Insurance Regulatory and Development Authority (IRDA) and market players, the government has come to the conclusion to raise it to 49 per cent.
“So there is a difference of opinion on that. I would have to do my best to convince the principal Opposition party as well as the other Opposition parties that it is in the best interest of the insurance industry and the people of the country that we must raise the FDI cap from 26 to 49 per cent.
“I intend to do just that. I intend to meet the leaders of the Opposition and convince them. I am confident that I can”, he said.
The Minister said if the FDI is limited to 26 per cent, no extra capital would flow into the country. The entire additional capital will have to be funded by Indian partners, who have said that they don't have that kind of capital.
“The only way additional capital will come is if you raise the cap to 49 per cent so that foreign partner can bring in more capital,” he said.
Chidambaram said all insurance companies have supported the IRDA proposal for raising the cap to 49 per cent.