ET NowIn a chat with ET Now, Ashvin Parekh of EY, shares his view on the 49% FDI in insurance. Excerpts:
ET Now: What do you make of the news around FDI in Insurance?
Ashvin Parekh: First and foremost, I must say that the new government has kept all its promises with regard to insurance particularly. The insurance industry wanted the new government to review the 80 cc limits - that is, the tax exemption limits - from one to one-and-a-half and they have done this.
The cabinet committee has already approved the insurance amendment bill at 49 per cent, which is very commendable. It is a promise the nation made about 12 years ago to all the foreign partners who came to India, clearly suggesting that the FDI limit will be raised from 26 to 49 per cent soon, but that did not happen.
Foreign partners who have actively been working in the Indian market have been waiting for this amendment to happen for the last 12-13 years.
The next thing this government should do after the committee approval is that it should take it to the Parliament at the earliest and get the Parliament to approve and notify the Act.
There are several provisions also - those related to health insurance, those related to the setting up of the insurance branches in the country, etc. Thus, there are a lot of reforms which were tied up with this particular amendment. I am glad that the government has taken a very positive approach to this.
ET Now: How soon do you think it would take for it to be taken to Parliament and thereafter being approved? What would your expectations be for the same?
Ashvin Parekh: I am still going by the promise made by the public statements of the finance minister and the prime minister. Both have reiterated that there would be an honest attempt by the new government to complete the pending bills which could not be cleared by the earlier government and this is one of those.
It is an important amendment in the finance sector and has been awaited for quite a while. Hence, if the government is serious about it, they can take it up in this session itself or the next Parliament session. Also, with the kind of majority the government enjoys in the Parliament, one is hopeful it should go through.
ET Now: What do you make of the news around FDI in Insurance?
Ashvin Parekh: First and foremost, I must say that the new government has kept all its promises with regard to insurance particularly. The insurance industry wanted the new government to review the 80 cc limits - that is, the tax exemption limits - from one to one-and-a-half and they have done this.
The cabinet committee has already approved the insurance amendment bill at 49 per cent, which is very commendable. It is a promise the nation made about 12 years ago to all the foreign partners who came to India, clearly suggesting that the FDI limit will be raised from 26 to 49 per cent soon, but that did not happen.
Foreign partners who have actively been working in the Indian market have been waiting for this amendment to happen for the last 12-13 years.
The next thing this government should do after the committee approval is that it should take it to the Parliament at the earliest and get the Parliament to approve and notify the Act.
There are several provisions also - those related to health insurance, those related to the setting up of the insurance branches in the country, etc. Thus, there are a lot of reforms which were tied up with this particular amendment. I am glad that the government has taken a very positive approach to this.
ET Now: How soon do you think it would take for it to be taken to Parliament and thereafter being approved? What would your expectations be for the same?
Ashvin Parekh: I am still going by the promise made by the public statements of the finance minister and the prime minister. Both have reiterated that there would be an honest attempt by the new government to complete the pending bills which could not be cleared by the earlier government and this is one of those.
It is an important amendment in the finance sector and has been awaited for quite a while. Hence, if the government is serious about it, they can take it up in this session itself or the next Parliament session. Also, with the kind of majority the government enjoys in the Parliament, one is hopeful it should go through.
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