The government of India has decided to take a fresh step to open up the insurance sector. The UPA’s biggest ally, left parties, is opposing the opening up of the Insurance sector but the government is looking for Left’s consent on this matter.

The government has proposed to allow 49% FDI in the Insurance sector. With this proposal, the foreign companies will be able to have an effective role in this sector in India.

During a high level meet, where Pranab Mukherjee, P Chidambaram and HR Bhardwaj were present, the government decided to convey the left representatives that there is a need of massive investment in the growing Insurance sector to continue the boom.

Rupchand Pal and Basudeb Acharya (CPM), Gurudas Dasgupta (CPI) and Abani Roy (RSP) were present in the meeting as the left representatives. The government clearly told them that the Insurance sector needs huge requirement of Rs 5,000 crore.

The domestic market is not so capable to generate the money and the FDI is needed to grow the sector. As far as Indian business houses are concerned, they have showed their little interest to invest in this segment. At the same time, the sector has registered impressive growth calling for fresh investments.

On the other hand, the Left representatives have showed their cautious approach in this matter. They said that the entry of foreign investors in the Indian market might lead to long-term risks.

The left leaders told the ministers that the left parties would go in detail of the FDI proposal and then they will decide anything on this matter in depth before getting back to the government.

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