- May 2014
- December 2013
Ruby Jacob, 05 Oct 2012
The government's reforms spree is still on. Yesterday the union cabinet approved significant amendments in Insurance, Pension and Companies Bills. It has also okayed amendments to the Competition Bill and Forward Contracts Bill among a host of others. It has given go-ahead to the 12th Five Year Plan aiming for an average growth rate of 8.2%.
Most significant reform for consumers is that they can travel abroad with the usual health insurance policies. They will apply on international travel also. Foreign Direct Investment (FDI) cap in insurance sector has been raised to 49% from the current 26%. This will bring in more capital for insurance companies and also introduce foreign expertise for players. Insurance companies will be forbidden from entering into a joint venture with a foreign partner who has been banned from doing insurance business in the home country. Similarly in order to encourage more players in the health insurance domain the minimum capital requirement for such companies has been eased.
The pension scene in the country has lacked action. The industry has been opened to FDI with a cap of 26%. To make NPS a more liquid option the cabinet has approved maximum withdrawal of 25% of individual contribution, subject to the regulator PFRDA's conditions for the same. Investors who would like to subscribe to schemes guaranteeing a minimum return can do so. PFRDA will issue notifications on such schemes.
The 12th Five Year Plan for 2012-2017 emphasizes on inclusive growth and would like to see benefits spread to weaker sections including SC/STs, OBCs, minorities and regional balance in development. The plan has ambitious programmes in health, education, water resource management, infrastructure development besides programmes for inclusiveness.
In all a set of 21 proposals were approved by the cabinet on 4 October. We will have to wait and watch how many of them get through the parliament and if they do how long it will be before they turn real from the paper.