49% FDI in insurance will bring more investment in sector: Singh

Jaitley said that the insurance sector is investment starved and several segments of it need expansion

Welcoming the government's proposal to hike FDI ceiling in insurance sector to 49 %, Fortis Healthcare Executive Chairman Malvinder Mohan Singh today said the move would help insurance firms attract much-needed capital from overseas partners.

"I think it (hike in insurance FDI) was long overdue. I am glad that it has happened. It will certainly bring in more investment, the insurance sector needs that investment so 49 % FDI in insurance is a very positive thing," Singh told PTI.

Presenting the Budget for 2014-15 earlier this month, Finance Minister Arun Jaitley proposed raising the Foreign Direct Investment (FDI) cap from 26 % to 49 % in the insurance sector.

"The insurance sector is investment starved. Several segments of insurance sector need expansion. The composite cap of the insurance sector is proposed to be increased to 49 % from the current level of 26 % with full management and control through the FIPB route," Jaitley said.

Jaitley also said two key initiatives -- free drug service and free diagnosis service -- would be taken up on priority as part of move towards 'Health for All'.

Charting out the healthcare roadmap of the new government, Jaitley said plans have been firmed up to set up four more AIIMS like institutions at Andhra Pradesh, West Bengal, Vidarbha in Maharashtra and Poorvanchal in UP is under consideration and a sum of Rs 500 crore has been set aside.

"We as an industry (healthcare) are certainly engaged with the government. I am of the clear view that I do see the government increasing investment in healthcare. They are clearly looking at how to increase the coverage of health insurance and how to ensure that healthcare is affordable and accessible for people across the country," Singh said.

The proposal to raise FDI cap has been pending since 2008 when the previous UPA government came up with Insurance Laws (Amendment) Bill to hike foreign holding in insurance joint ventures to 49 % from the existing 26 %.