The Department for Promotion of Industry and Internal Trade (DPIIT) will soon seek to approach the Union Cabinet to seek its approval on changes in FDI policy to facilitate disinvestment of country’s largest insurance company LIC, a top government official said on Sunday. said.
DPIIT secretary Anurag Jain said the issue has been discussed with the Department of Financial Services and the Department of Investment and Public Asset Management (DIPAM) and all are unanimous.
“Now it is a matter of preparing the draft. We will try to make the cabinet note soon after inter-ministerial consultations, get the approval. It will happen very soon,” Jain told reporters here.
The Finance Minister has directed that disinvestment is to be completed during the current financial year, so we also have to work at the same pace.
As per the current Foreign Direct Investment (FDI) policy, 74 per cent foreign investment is allowed in the insurance sector under the automatic route. However, these rules do not apply to Life Insurance Corporation of India (LIC), which is administered through a separate LIC Act.
As per SEBI regulations, both Foreign Portfolio Investment (FPI) and FDI are allowed under public offering. However, sources said that since there is no provision for foreign investment in the LIC Act, the proposed LIC IPO needs to align with SEBI’s norms regarding participation of foreign investors.
The cabinet had approved the initial public offering (IPO) of LIC in July last year and stake sale is being planned in the current March quarter.
When asked about the issue of FDI listing of Indian startups, the secretary said that the department is still probing the matter to see what startups want.
“There is nothing in my mind that stops them (that) from doing it. Why do they want to go out and make the list, what are the factors that are not there? We are engaged in discussions with industry leaders.
“I know there was a proposal that was under consideration. There are ideas that need to be synchronized and reach a final conclusion. But I want to understand what is really needed. Why can’t it be listed . .. so we are still investigating it,” he said.
Further, Jain informed that DPIIT is organizing the first Startup India Innovation Week from January 10.
DPIIT has so far recognized over 61,000 startups and created over 6 lakh jobs since 2016.
“The primary goal of this Startup and Innovation Festival is to bring together leading startups, entrepreneurs, investors, incubators, funding institutions, banks, policy makers and other national/international stakeholders from across the country to celebrate entrepreneurship and promote innovation, ” They said.
The platform will also promote knowledge exchange, develop entrepreneurship ecosystem capability; raising global and domestic capital for startup investments; and provide opportunities for market access.
The week-long event includes interactions of select startups with Prime Minister Narendra Modi on January 15; Roundtable with global investors and domestic funds; Launch of Open Network (ONDC) digital strategy for digital commerce.
ONDC is an initiative of DPIIT, which aims to democratize digital commerce, shifting it from a platform-centric model to an open network.
As UPI stands for Digital Payment Domain, ONDC stands for E-commerce in India. It will enable buyers and sellers to be digitally visible and transact through an open network, irrespective of the platform/application they use. It will empower merchants and consumers by breaking down silos to create a single network to foster innovation.
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