The Centre is modifying the foreign direct investment (FDI) process to accommodate the planned initial public offering (IPO) of Life Insurance Corporation (LIC), said the media reports.
The government would take the final call on the topic after discussing with the Cabinet, as per the article, quoting the secretary of the Department for Promotion of Industry and Internal Trade (DPIIT).
Anurag Jain, secretary in the DPIIT, said the currently prevailing system related to the sector will hardly facilitate the disinvestment process of LIC and, hence, demands for a revision, according to PTI.
“We are working on further simplification of the FDI policy. A very important point for further simplification is required urgently as we have to do the LIC disinvestment. So, we would be coming out with a revised FDI policy which will facilitate LIC disinvestment,” he said.
The matter is in advanced talks with the Department of Financial Services (DFS) and the Department of Investment and Public Asset Management (DIPAM).
“We have had two rounds of discussions at my level and now, we have (DPIIT, DFS, and DIPAM) come on the same page. So, we are in the process of drafting those changes in the FDI policy. We will go to the Cabinet (for approval),” Jain said.
The already existing FDI policy says only 74 percent of foreign investment is permissible under the automatic route in the insurance sector. However, in the case of LIC, these rules are not applicable as it is administered through a separate LIC Act.
On LIC disinvestment, Jain said that the Cabinet would okay on the changes required in the FDI policy.
As per Sebi rules, both FPI and FDI are allowed under public offer. However, sources said since there is no provision for foreign investments in LIC, there is a need that the LIC IPO should be aligned with the Sebi norms in case of foreign investor participation.
In July last year, the Cabinet gave its nod to the initial public offering (IPO) of LIC and the share-sale is scheduled for the current March quarter.
In addition, throwing some light on the long-pending e-commerce policy, the secretary said the DPIIT is in the last stages, “giving touches” to the e-commerce policy and the national retail trade policy.
The e-commerce policy “is finalized at my level and we have circulated that to other departments. Now we will have a higher level discussion… We will have discussions with departments on that and then we will finalize it…A lot of work has been done”, he said.
He further said that FDI is allowed in only the marketplace model and “I do not see any change in view on that”.
On the question regarding oxygen availability as Covid-9 cases are surging in the country day-by-day, he said the government is well prepared and “we can meet the demand of up to 19,000 metric tonnes”.