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Govt to amend Patents Act, allow 40 pc foreign equity in insurance

In a far-reaching decision, the government has approved a proposal to amend the Indian Patents Act providing for mail box and exclusive marketing rights.

The Cabinet, which met on Monday night, also approved a proposal to amend the Indian Insurance Act and Life Insurance Act to enable the entry of the private sector.

Meanwhile, Finance Minister Yashwant Sinha said that a bill will be introduced in the coming session of Parliament, seeking amendments in the Indian Patent Act, 1970. Work on another bill relating to the patent product would be undertaken simultaneously, he added.

The Cabinet's decision to open up the insurance sector is subject to the condition that foreign equity holding should not exceed more than 40 per cent.

The Cabinet has also decided to grant statutory status to the Insurance Regulatory Authority and a bill to this effect would be introduced in the coming session of Parliament.

The Cabinet had decided to allow a ceiling of 26 per cent to the foreign collaborator in the insurance sector while the balance 14 per cent could be taken up by foreign financial institutions, non-resident Indians and overseas corporate bodies. Sixty per cent equity should be held by Indian promoters, he said.

While presenting the Union Budget in July, Finance Minister had announced plans to open up the insurance sector to the private sector but the issue was referred to a group of ministers following disagreement on the quantum of foreign equity holding in a new insurance company. The group of ministers suggested a ceiling of 26 per cent in case of foreign collaborators, which was adopted by the Cabinet yesterday.

The decision is expected to generate a lot of heat in Parliament considering that then finance miniser P Chidambaram was forced to withdraw the IRA Bill introduced in the eleventh Lok Sabha following protests from the Bharatiya Janata Party. The latter wanted the United Front government to give an undertaking that it would not allow foreign companies to enter the insurance sector.

The Cabinet had on November 18 deferred a decision on a comprehensive amendment to the Patents Act following differences among the Cabinet members. It also sought more details from several departments.

The government has to clear a part of the proposal to amend the Indian Patents Act, 1970 to meet the April 19, 1999 deadline set by the World Trade Organisation. The Indian law has to be amended to bring it in tune with international practices.

UNI

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