Insurance, pension bills in budget session: Chidambaram

Finance Minister P Chidambaram plans to introduce the insurance and pension reform bills in the budget session of Parliament as he is optimistic of securing the opposition's support on the contentious legislations, Bank of America Merrill Lynch said after an investor interaction with Chidambaram that it hosted in Singapore.

The insurance bill proposes to raise the foreign direct investment cap in the sector to 49 per cent from 26 per cent, while the pension bill will open up the sector to foreign investment up to 49 per cent.

"The finance minister hopes to pass the insurance bill and the pension bill in the budget session. He mentioned that behind the noise, there were quiet negotiations with the opposition parties and support from them," Bank of America Merrill Lynch said in a note on Wednesday.

Chidambaram, who is on a four-nation tour to woo investors, had on Tuesday promised businessmen in Hong Kong a stable budget that will take the fiscal consolidation process forward and not include any unpleasant tax shocks.

The cabinet had in October last year approved the Insurance Laws (Amendment) Bill 2008 with 49 per cent foreign investment limit in the sector, but the government did not move it in Parliament's winter session as it lacks the numbers to get the bill passed on its own.

Chidambaram again departed from his assertions in Hong Kong a day earlier that the goods and services tax (GST) proposal, meant to consolidate the plethora of indirect taxes charged by various states as well as the centre, would be introduced in the budget session.