Finance Minister P Chidambaram criticised the Bharatiya Janata party for shifting its stance on further opening up the insurance sector, which he said was crucial for greater flow of investment in infrastructure.
"I can understand the opposition from Left parties, who were opposing it throughout. But it is difficult to understand that those parties (BJP), which had first opposed it, then supported it when in power and are now again opposed to it," he said releasing a book written by G N Bajpai, chairman of Securities and Exchange Board of India on Wednesday night.
Favouring a hike in FDI limit in insurance from 26 to 49 per cent, he said, "We paid a heavy price for neglecting the insurance sector. It was one of the wisest decisions to open up the sector for competition. Insurance and pension provides funds for long-term investments."
Recalling his experience on pushing ahead the IRA Bill when he was a finance minister in the United Front government, Chidambaram said, "It was not easy. The Bill was defeated in 1997."
But those (BJP), who were responsible for defeating the Bill in 1997, reversed their stance after coming to power and opened up the insurance sector with a FDI limit of 26 per cent in 1999, he said.
Hike in FDI limit was crucial for private players to infuse more capital and sustain high growth.
This in turn would lead to higher penetration of insurance cover and channelise more savings into investments in infrastructure sector.