Apparently unfazed by the opposition to its newly-regained reformist zeal, the UPA government has finally okayed Foreign Direct Investment (FDI) in pension and a hike in the FDI cap in insurance sectors.
The Cabinet has cleared 26 % FDI in pension and has raised the FDI cap in insurance to 49 %. Currently, no foreign investment is allowed in the pension sector and only 26 per cent FDI is allowed in insurance. The FDI moves need to get parliamentary approval as they are governed by an act of law and do not fall in the executive domain.
In another major decision, the Cabinet has also cleared the Companies Bill, 2011. But to push these bills, the government needs to win the approval of Parliament, which seems to be a bit dicey given its being a minority government with 252 Lok Sabha seats. Most other allies and opposition parties are opposed to the reforms and have already announced their intention to defeat the bill in the house.