President Pranab Mukherjee signs ordinances on raising FDI in insurance sector and facilitating e-auction of coal blocks

New Delhi(PTI): President Pranab Mukherjee on Friday signed ordinances on raising Foreign Direct Investment (FDI) in insurance sector and facilitating e-auction of coal blocks.

On December 24, a day after the conclusion of the Winter session of Parliament, the Union Cabinet headed by Prime Minister Narendra Modi had approved promulgation of the Ordinance on Insurance Bill, re-promulgation of the Coal Ordinance and allowing 100% FDI in medical devices in the pharmaceutical sector.

Earlier, briefing reporters, Finance Minister Arun Jaitley had expressed hope that hiking of the foreign investment cap in the insurance sector to 49%, which has been pending since 2008, will result in capital inflow of US$ 6-8 billion.

Even though the Select committee by majority had recommended the Bill for adoption, the same was not permitted to be taken up for discussions because of disturbances in the Rajya Sabha. The government therefore had decided to recommend to the President the promulgation of the insurance amendment laws. There are 52 insurance companies, of which 24 are in the life insurance business and 28 in general insurance segment.

The re-promulgation of ordinance on coal will facilitate e-auction of coal blocks for private companies for captive use and allot mines directly to state and central PSUs. Liberalising of the FDI policy for the medical device segment in the pharmaceutical sector is expected to help attract more investments and boost the domestic manufacturing.

The total capital deployed in the private life insurance sector is close to Rs 35,000 crore. With FDI at 26%, foreign equity is close to Rs 8,700 crore.