Revised FDI policy for LIC disinvestment? Here is what DPIIT secretary Anurag Jain said

In a latest development, Anurag Jain, secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) on the question of foreign direct investment (FDI) said that there will be changes in the FDI policy for LIC IPO, as reported by Zee Business reporter Ambarish Pandey. 

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It has been further reported that the consultation from all concerned departments has been completed and the draft-making process has begun. Furthermore, it has also been informed that the notification will come soon. 

Recently, Jain said to reporters, "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," as per a PTI report. 

Jain has further informed that the LIC disinvestment work will be completed in the same financial year. He also added that talks are continuing for listing of start-ups directly on foreign exchange. It has been contacted several times. 

The DPIIT Secretary further said that there is the need to understand the bottleneck and will soon make consultation clear. 

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 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 IPO with Sebi norms regarding foreign investor participation.

The Cabinet had in July last year approved the initial public offering (IPO) of LIC and the stake sale is being planned in the current March quarter.