By Ajay Jha
The Managing Director of IFFCO Dr U S Awasthi has hailed the move to raise FDI in insurance sector from 26 to 49 percent. Last week Indian Parliament passed the bill which drew applause from both domestic and international quarters.
Farmers’ cooperative IFFCO which also has a stake in the insurance sector via IFFCO-TOKIO welcomed the move. Dr Awasthi tweeted “ #IFFCO Welcomes #PM @narendramodi ‘s major eco reform of raising #Insurance #FDI 4rm 26to49%. More funds, Coverage & Infrastructure 4 country.”
The much needed reform has taken 15 years to happen as the last reform dated to 2000 when the insurance sector was partially opened by the previous BJP govt. The sector grew till 2008 and stagnated thereafter. The two state players LIC and General Insurance monopolize the market with former alone claiming 70 percent of it.
Experts foresee a vast expansion of the sector sooner than later as none of the private players with their limited stake had ventured outside metropolitan cities in the past. There is a vast field in semi-urban and rural areas where the pumping of FDI fund could breathe life in the sector, they say.
According to a blog in the Wall Street Journal India could see investment from 1 to 3 billion $ in the wake of opening up of the sector. IFFCO is going to make most of this opportunity, said one of the officials talking to the Indian Cooperative.
Awasthi who takes pride in his close association with the farmers also lauded the Prime Minister for opening up line of communication directly to the farmers through “Man Ki Baat”. Tweeting in Hindi he said that IFFCO welcomes PM’s initiative to link up with the farming community. Awasthi is currently touring West Bengal’s rural areas, precisely doing what Modi intends to do on March 22.
