Government to defy opposition with fresh economic measures

Another round of economic liberalisation is expected today as the union cabinet meets to consider raising the cap on foreign  investment in the insurance sector to 49 per cent from the current 26 per cent and opening pension schemes to foreign direct investment (FDI).

The creation of a national investment board is also likely to be considered, as well as giving more teeth to regulatory bodies like the FMC (Forward Markets Commission), putting forth a competition bill to bring all sectors under the Companies Act, and a model agreement for making the Infrastructure Development Fund (IDF) more functional.

This is the second time within a month that the union cabinet would push for liberalisation of the economy.

If any of these steps materialise, it would clearly indicate that the Congress-led United Progressive Alliance government is serious about bringing about economic change despite strong opposition from most of its allied parties, not to mention the opposition.

Apart from the insurance bill which seeks to raise the FDI limit in insurance, a proposed pension fund regulatory and development authority (PFRDA) bill seeks to open up the pension sector to foreign FDI as well.

Moreover, fresh bodies are likely to be created to look into speeding up clearances for infrastructure projects.