Government is making changes in the foreign direct investment (FDI) policy to allow disinvestment of Life Insurance Corporation of India (LIC) after consultations with the finance ministry, a top government official said, adding that the e-commerce policy too is at last stages of finalisation.
Anurag Jain, secretary in the department for promotion of industry and internal trade (DPIIT), said on Thursday that the current policy related to the sector will not facilitate the disinvestment process of LIC and therefore it needs revision.
"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 told reporters.
The matter is being discussed with the department of financial services and department of investment and public asset management (DIPAM).
"We have had two rounds of discussions at my level and now, we have 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), " he said.
According to the current FDI policy, 74 per cent 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 Securities and Exchange Board of India (SEBI) rules, both FPI and FDI are permitted under public offer. However, sources said that since the LIC Act has no provision for foreign investments, there is a need to align the proposed LIC initial public offer (IPO) with SEBI norms regarding foreign investor participation.
The Cabinet had in July last year approved the IPO of LIC and the stake sale is being planned in the current March quarter.
Further, talking about the long-pending e-commerce policy, the secretary said the DPIIT is in the final stages of "giving touches" to the e-commerce policy and the national retail trade policy.
The e-commerce policy "is finalised 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 finalise it...A lot of work has been done", he said.
He added that FDI is allowed in only the marketplace model and "I do not see any change in view on that".