CPM opposes raising FDI limit in insurance

The CPI (M) today voiced its opposition to the proposal to raise the cap on foreign direct investment in the insurance sector and said it had not been consulted in this regard.

CPI (M) general secretary Prakash Karat said that the position of his party remained unchanged since 2004 when it had first opposed any increase in the FDI limit. "In the first budget of the UPA government in 2004, they had announced the policy of increasing the FDI cap in insurance and we had opposed at that time and our stand remains."

The CPI (M) against the new insurance bill to raise the FDI cap in the sector from 26 per cent at present to 49 per cent. The CPI (M), along with its other Left allies, had earlier stalled the passage of the Banking Regulation Amendment Act and the pension funds from being allowed to invest in equities, the Pension Fund Regulatory and Development Authority Bill, which, it claims would lead to privatisation of pension funds.

Karat also demanded to know why the financial sector was being thrown open to foreign capital. "We don't want the financial sectors to be taken over by foreign finance capital," he said, giving the prime reason for the Left opposition.

"I don't know what they are planning to do now. We have only heard they are bringing some legislation... There was no consultation because we have told them we don't agree with it," he said.