Plans by the new government to open the insurance sector to more foreign investment suffered a setback on Thursday after the opposition blocked the legislation in the upper house. The landmark bill to liberalise the insurance industry, which marks Prime Minister Narendra Modi’s first stab at legislative reforms, will now go to a parliamentary committee, which will submit a report later this year. The bill proposes to increase the limit on foreign investment in insurance ventures to 49 percent from the current 26 percent. Modi took office in May vowing to restore economic momentum and end years of policy paralysis, but the Congress-led opposition which has a majority in the Rajya Sabha demanded that a parliamentary panel examine the bill, saying there was no hurry to approve the measure in the current session which ends on Thursday.
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