New Delhi, Dec 10 (IANS): A select committee of the Rajya Sabha headed by BJP's Chandan Mitra Wednesday tabled its report on insurance bill in the upper house Wednesday, with Congress agreeing "in principle" to support the bill.
The bill proposes to raise the existing 26 percent cap on foreign direct investment (FDI) in the sector to 49 percent, and recommends a composite cap.
"The Committee recommends that the composite cap of 49 percent should be inclusive of all forms of foreign direct investment and foreign portfolio investments," said the report tabled in the Rajya Sabha.
Congerss spokesperson Abhishek Manu Singhvi expressed "in principle" support to the bill.
"None of us can take away the prerogative of the parliament to deal with the matter. But our support depends on what is written in the fine tune," Singhvi told the media here.
"Most of our concerns have been met with in the select committee of the parliament. That in itself is a huge victory," he said.
Singhvi said that the bill was a Congress idea in principle and the party's support now depended on the exact shape and "nitty-gritty" of the final bill which will be tabled.
"Subject to this, in principle, we don't have any objection," he added.
The panel report contains dissent notes from four members - P Rajeev of Communist Party of India-Marxist (CPI-M), Derek O'Brien of Trinamool Congress (TMC), Ram Gopal Yadav of Samajwadi Party (SP) and K.C. Tyagi of Janata Dal-United (JDU).
However, if Congress supports the bill, it will be smoothly passed in the upper house.
The committee in its report meanwhile also disagreed with with the argument of not increasing the cap in the sector and stressed the hike will benefit the Indian insurance sector and facilitate meeting of its capital requirements.
The report said that incremental equity should ideally be used for expansion of capital base to strengthen the insurance sector.
"In view of the increasingly globalised economy and expanding global financial flows, involving liberalised foreign investment (including in India) in various fields like manufacturing, banking, etc. for growth and development, the committee is not in agreement with the argument of not increasing the cap in insurance sector and goes with the provision of the bill," the report said.
"The committee recommends that adequate regulations be framed by (sector regulator) IRDA to facilitate the entry of multinational insurance brokers so that they can provide an added impetus to the Indian insurance and re-insurance sector," it said.
Mitra told reporters that government is hopeful of support from Congress.
"We have been talking to the Congress and have tried to accommodated many of the issues they brought up. Therefor I expect this is going to be a composite report," he said.
The bill, which was originally brought by the Congress, was sent to the select committee during the last parliament session.
Once through, it is expected to bring in much needed additional equity to the tune of Rs.25,000 crore to the sector. While up to 26 percent foreign investment will be allowed automatically, any FDI beyond that will require approval through the Foreign Investment Promotion Board (FIPB). Control of the insurance venture will have to remain in Indian hands.