CCEA approved sale of 10 million tonnes of wheat in Open Market to Check Prices

The Cabinet Committee on Economic Affairs (CCEA) on 24 July 2014 approved the sale of 10 million tonnes of wheat from the FCI stock in the open market in order to boost domestic supply and check prices. The CCEA was headed by Prime Minister Narendra Modi.

Highlights of the Meeting

The reserve price under OMSS was fixed at 1500 rupees per quintal plus freight charges for old crop and five percent premium for new crop.

It was decided that wheat would be sold through the e-tendering process by the State-run Food Corporation of India (FCI) with an aim to improve domestic supply of wheat and check prices, besides reducing storage pressure on FCI.

The wholesale price of wheat was increased to 19 rupees per kg in the national market in July 2014, from 16.10 rupees per kg in July 2013. Additional release of wheat will ease prices.

Continue Reading...

Cabinet approved 49% FDI in insurance through FIPB route

The Cabinet on 24th July approved 49% foreign investment in insurance companies through the FIPB route ensuring management control in the hands of Indian promoters.

"The Cabinet Committee on Economic Affairs has approved raising of FDI cap in insurance sector to 49% from 26%," sources said after a meeting of the CCEA, headed by Prime Minister Narendra Modi.

With the Cabinet approving the amendments to the long pending Insurance Laws (Amendment) Bill, it will now be taken up by Parliament.

In his budget speech, finance minister Arun Jaitley had said that the insurance sector is investment starved and there is a need to increase the composite cap in the sector to 49%, with full Indian management and control, through the FIPB route.

The move would help insurance firms to get much needed capital from overseas partners.

The proposal to raise FDI cap has been pending since 2008 when the previous UPA government introduced the Insurance Laws (Amendment) Bill to hike foreign holding in insurance joint ventures to 49% from the existing 26%.

However, the bill could not be taken up in the Rajya Sabha because of opposition from several political parties, including the BJP. The insurance sector was opened up for private sector in 2000 after the enactment of the Insurance Regulatory and Development Authority Act, 1999 (IRDA Act, 1999).

This Act permitted foreign shareholding in insurance companies to the extent of 26% with an aim to provide better insurance coverage and to augment the flow of long term resources for financing infrastructure.

The industry has been demanding for long to increase the FDI limit for adequate funds for expansion of the sector.

Continue Reading...