The government will bring legislation in Parliament's budget session to increase the maximum permissible Foreign Direct Investment (FDI) in insurance from the present 26 per cent to 49 per cent.
Gordon Brown, UK Chancellor of the Exchequer currently in Delhi, said on Thursday that Finance Minister P Chidambaram had given him this assurance.
"(He) indicated that a bill will be introduced in Parliament next month to increase the FDI limit in insurance to 49 per cent," Brown told reporters after launching, with Chidambaram, the India-UK Economic and Financial Dialogue. The bill will amend the Insurance Regulatory and Development Authority (IRDA) Act.
The Left reacted strongly. "There is no question of allowing the cap to be raised. We have had no talks with the government on this issue. We will oppose it tooth and nail," CPI(M)'s Basudeb Acharya said. "How can Chidambaram give such assurances," demanded CPI's D Raja.
The All India Insurance Employees Association's Pradip Biswas said, "Employees in the sector will strike work countrywide if the bill is brought."
(With agency inputs)