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Cabinet’s clearance for FDI in insurance & pensions inspiring: PHD Chamber

India Infoline News Service/ 18:28 , Oct 05, 2012

The prices of crude oil have also decelerated significantly, following the exchange rate advantage.

The plethora of recent reforms has boosted economic and business sentiment. The stock markets have seen an upsurge followed by an appreciation of the rupee. The prices of crude oil have also decelerated significantly, following the exchange rate advantage.
 
The Cabinet approval to the slew of new reforms including raising the cap of Foreign Direct Investment in insurance sector to 49% from 26% and allowing investment by foreign investors to invest up to 49% in pension Funds will boost enthusiasm in the financial sector.
 
The increase in the cap in insurance sector will result in providing adequate funds to the sector. Considering the fact that less than 5% of the population invests in insurance, the move will provide a thrust to its growth in the long term.
 
Besides this, bringing in foreign players in the field could make it more attractive for investment and may help to divert household savings into financial assets as against physical assets.
 
While the Pension Fund Regulatory and Development Authority Bill would allow institutional investors from overseas to invest into Pension Funds, the revised Companies Bill, 2011 will make it mandatory for firms to spend on CSR and those not doing do will have to give a justified reason. This move could go a long way in diverting funds for social sector and lead to inclusive growth.
 
Other than these, the proposal to declare airports at Lucknow, Varanasi, Tiruchirapalli, Mangalore and Coimbatore as international airports will ease the hurdles in the infrastructure sector.
 
The provision to allow foreign retailers to hold 51% stake in the multi-brand retail sector along with the enhanced cap on the single brand segment to 100% would help in reducing post-harvest losses and minimizing wastage. This would provide state of the art infrastructure right from post-harvest, farm gate linkages, packaging and cold storages.
 
And the move to allow 49% FDI in the aviation sector with the view of the ongoing crisis in the aviation sector, the entry of foreign players will not only bring funds but expertise as well.
 
These reforms have immense potential to revive the economic growth momentum and help to take growth to the higher trajectory. Going ahead, implementation of major tax reforms, GST and DTC, have immense potential to enhance India's growth potential by boosting productivity and improving investments environment
 
  

 



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