Narendra Modi faces early resistance in insurance reform push
NEW DELHI: Plans by the government to allow more
foreign investment in India’s still-small insurance sector have hit snags in
Parliament, testing Prime Minister Narendra Modi’s campaign promise to push
through reforms to revive the economy.
Over the past week, the government has twice sought to
introduce legislation in the upper house of Parliament permitting 49 percent
foreign participation in an insurance venture, up from 26 percent, but it has
been blocked by the Opposition.
Finance minister Arun Jaitley has called the heads of
political parties to a meeting on Wednesday in a bid to form a consensus behind
the legislation so billions of dollars can flow into a sector starved of funds
and held back by over-regulation.
Modi’s government expects that if the sector is opened
further, insurers such as Canada's Sun Life Financial Inc, Prudential PLC
Nippon Life Insurance Co, Italy’s Generali and Dutch insurer Aegon NV will
inject more funds into what is the world's 10th biggest life insurance market —
even though currently fewer than 4 percent of Indians have insurance.
Jaitley needs the support of the opposition in the 250-member
upper house of Parliament where his Bharatiya Janata Party (BJP) and its allies
have about 60 members. The ruling group faces no problem winning approval from
the lower house, where it has a comfortable majority after an election in May.