New Delhi: India Inc on Thursday lauded the Cabinet's decision to approve legislative changes that will allow up to 49 per cent foreign equity in the pension sector and hike such limit in insurance to 49 per cent from 26 per cent, calling it "landmark" and "pathbreaking".
The Cabinet meeting, presided over by Prime Minister Manmohan Singh, also approved other long-pending measures such as crucial changes in the Companies Act, and giving greater autonomy to the regulator to introduce more commodities and options for futures trading.
"The new instalment of big bang reforms is a clear message that the government is determined to strengthen the economy," RV Kanoria, president of Federation of Indian Chambers of Commerce and Industry (FICCI) said.
The Cabinet also cleared the draft 12th Five Year Plan document (2012-13 to 2016-17), which targets an economic growth of 8.2 per cent.
According to him, while these forward-looking measures would infuse much-needed capital in the insurance and pension sectors, there is an imperative need to make investment guidelines more flexible so that such funds can be used to support infrastructure development.
FICCI also welcomed the Cabinet approval to the changes in the Companies Bill 2011 which has been prepared after considering recommendations of the standing committee and comments from the finance and law ministries as well as the Planning Commission.
Another industry body, Confederation of Indian Industry (CII) said that the approvals by the Cabinet of the Insurance Bill, Pensions Bill, Revised Companies Bill and the Competition Bill are of great significance as it marks the continuation of the reforms thrust that began September 13.
"The industry in India and the global investor community are taking due note of the swift and decisive actions by the government and sentiments would only be northbound from here on," CII said in a statement.
"CII is hopeful that all political parties would see the merit of these bills and facilitate a speedy passage during the forthcoming winter session of Parliament," it added.
The decisions, announced by Finance Minister P Chidambaram, included designating five domestic airports for overseas operations, bringing all the financial services under the Competition Commission and revamp of employment exchanges.
The Cabinet also cleared the draft 12th Five Year Plan document (2012-13 to 2016-17), which targets an economic growth of 8.2 per cent. This will now go to the National Development Council for adoption. Also cleared was a fund for infrastructure.
Unlike the decisions on retail, aviation and broadcasting, the approvals on insurance, pension and forward contracts in commodities need parliament's approval and could face rough weather from the opposition, especially the Bharatiya Janata Party (BJP).