The Department for Promotion of Industry and Internal Trade (DPIIT) will soon approach the Union Cabinet to seek its approval on changes in the foreign direct investment (FDI) policy to facilitate the disinvestment of the country's largest insurer LIC, a top government official said on Wednesday.
DPIIT Secretary Anurag Jain said an inter-ministerial consultation on the matter is at its last stage.
"Hopefully, it should happen very soon... All the comments that will come (from different departments) will be supportive (of the proposal)," he told reporters.
He also expressed hope that the Cabinet will soon take up this proposal.
The DPIIT is making changes in the FDI policy to facilitate the disinvestment of LIC, after taking views from the finance ministry.
According to the current FDI policy, 74 per cent of foreign investment is permitted under the automatic route in the insurance sector. However, these rules do not apply to the Life Insurance Corporation of India (LIC), which is administered through a separate LIC Act.
As per SEBI rules, both FPI and FDI are permitted under public offer. However, since the LIC Act has no provision for foreign investments, there is a need to align the proposed LIC IPO with SEBI norms regarding foreign investor participation.
The Cabinet had in July last year approved the initial public offering (IPO) of LIC and the stake sale is being planned for the current March quarter.
The finance minister has directed that the disinvestment has to be completed during the current financial year, "so, obviously, we will try to expedite it (Cabinet note) as much as possible," he added.
On the Budget, the secretary said the Budget has given a clear way forward and now, it is up to the industry and entrepreneurs to take up the challenge and take India towards Vision 2047.
