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Federal Government To Modify FDI Policy To Permit Life Insurance Corporation's Stake Sale

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Government remains in the procedure of making modifications in the FDI policy to allow LIC disinvestmentNew Delhi: Government is making modifications in the foreign direct investment (FDI) policy to permit disinvestment of Life Insurance Corporation of India (LIC) after assessments with the financing ministry, a leading government official stated, adding that the e-commerce policy too is at last stages of finalisation.Anurag Jain, secretary in the department for promo of market and internal trade (DPIIT), said on Thursday that the present policy associated to the sector will not help with the disinvestment procedure of LIC and therefore it requires revision.

We are working on additional simplification of the FDI policy.

A very essential point for more simplification is needed urgently as we need to do the LIC disinvestment.

We would be coming out with a revised FDI policy which will facilitate LIC disinvestment, he told reporters.The matter is being gone over with the department of financial services and department of investment and public possession management (DIPAM).

We have had two rounds of conversations at my level and now, we have actually come on the same page.

We are in the process of drafting those modifications in the FDI policy.

We will go to the Cabinet (for approval), he said.According to the current FDI policy, 74 per cent foreign investment is permitted under the automatic path in the insurance coverage sector.

These guidelines do not apply to the Life Insurance Coverage Corporation of India (LIC), which is administered through a different LIC Act.As per Securities and Exchange Board of India (SEBI) guidelines, both FPI and FDI are permitted under public deal.

However, sources stated that since the LIC Act has no arrangement for foreign financial investments, there is a requirement to align the proposed LIC preliminary public deal (IPO) with SEBI standards concerning foreign financier participation.The Cabinet had in July in 2015 approved the IPO of LIC and the stake sale is being prepared in the existing March quarter.Further, discussing the long-pending e-commerce policy, the secretary stated the DPIIT is in the final stages of offering touches to the e-commerce policy and the nationwide retail trade policy.The e-commerce policy is finalised at my level and we have circulated that to other departments.

Now we will have a greater level conversation ...

We will have conversations with departments on that and then we will finalise it ...

A great deal of work has actually been done , he said.He included that FDI is allowed just the marketplace design and I do not see any modification in view on that .




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