The cabinet approved bills on Thursday to attract foreign investment into insurance and pensions in the latest move by Prime Minister Manmohan Singh to restore confidence in the economy, but the reforms will face a tough fight in parliament.
The insurance bill would raise the cap on foreign ownership of insurance companies to 49 percent, Sports Minister Ajay Maken told reporters after the cabinet meeting at Singh's residence. The limit now is 26 percent.
An elderly man walks in a park in Mumbai January 18, 2009.
He did not provide details on the bill regarding pension companies, currently blocked to foreign investment.
The steps followed big-ticket policies unveiled last month, including hiking diesel prices and inviting in foreign supermarkets, aimed at fending off a cash crunch and reviving growth, which has slowed to its slowest pace in nearly three years.
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Those reforms helped drive up India's markets in recent weeks, and the latest moves added to the positive sentiment and could boost interest in a forthcoming sale of shares in state-owned companies.
"It is a signal of rationalising the banking, financial services and insurance sector, and is a welcome development. It will induce more confidence in India's economy and improve the investment climate," said Saugata Bhattacharya, an economist at Axis Bank in Mumbai.
Anticipation of the outcome of the cabinet meeting triggered gains in financial stocks such as State Bank of India and ICICI Bank, driving the BSE Sensex to a 15-month high, while the Nifty hit a 17-month high.
Most of India's 24 insurance companies have lost money in the past decade, hit by restrictions on foreign holding and by regulatory changes.
Singh faces a tough fight to win parliament's approval for more foreign investment in the economy, especially with two state elections looming and after an outcry over the decision to allow foreign supermarkets into the retail sector.
The pension and insurance bills have been proposed for nearly a decade. Unlike last month's measures, they need to be approved by parliament, where the coalition government is in a minority after its largest partner pulled out in anger at last month's reforms.
The cabinet also signed off on a shareholder-friendly bill to make corporate management more accountable, which would overturn a half-century old law.
Giving some hope to the government, the normally obstructive opposition Bharatiya Janata Party (BJP) said it was waiting for further details but was not totally opposed to the latest reforms.
India's economic growth rate was around 5.5 percent in the last two quarters, a far cry from the near double-digit rate of recent years. Global credit rating agencies have warned India could lose its investment grade rating because of unsustainable budget and current account deficits.
Last week a government panel, led by former finance secretary Vijay Kelkar, warned of a "fiscal precipice" if the government does not urgently slash fuel, food and fertilizer subsidies to curb a deficit that could hit 6.1 percent of gross domestic product this fiscal year.
The first set of reforms announced last month have boosted the rupee, which partly recovered from a sharp drop in value this year, but the RBI says more action is needed to save the budget and reduce inflation.
"The diesel price hike barely scratched the surface. The more important signal will be to act on the Kelkar committee recommendations and have a fiscal roadmap," said A Prasanna, chief economist at ICICI Securities Primary Dealership.
This morning, there are more than one billion people using Facebook actively each month. If you're reading this: thank you for giving me and my little team the honor of serving you. Helping a billion people connect is amazing, humbling and by far the thing I am most proud of in my life.
I am committed to working every day to make Facebook better for you, and hopefully together one day we will be able to connect the rest of the world too.
Social media company Facebook Inc (FB.O) reported on Thursday it reached the 1 billion user mark last month, while Chief Executive Mark Zuckerberg said it would keep pursuing growth through mobile devices.
The No. 1 social network has faced a rough road since its May initial public offering. Investors and analysts have fretted over a sharp slowdown in revenue growth and questioned how Facebook will make money from users as people access its site on mobile devices.
Facebook shares have lost more than 40 percent of their value since the stock debuted at $38.
Facebook, based in Menlo Park, California, hit the 1 billion milestone on September 14 at 12:45 p.m. Pacific time, the company said on its website. This is up by 45 million users since June.
It said it had 600 million mobile users, according to a fact sheet the company posted.
In an interview on NBC's "Today" show broadcast on Thursday, Zuckerberg was asked by co-anchor Matt Lauer about how, with 1 billion users, the company wasn't "killing it," by making money.
"I think it depends on your definition of 'killing it.' I mean we are making billions of dollars," Zuckerberg said. In its last earnings report, Facebook said revenue increased by 32 percent to $1.18 billion in the second quarter.
The 28-year-old CEO talked about the growth potential from mobile users. "There's 5 billion people in the world who have phones, so we should be able to serve many more people and grow the user base there," he said.
In September, Zuckerberg said the company's new mobile ads were delivering better results for advertisers than its traditional ads on personal computers.
As for his own phone habits, he said he has several devices, but recently had been using an iPhone 5 he received from Apple CEO Tim Cook.
Zuckerberg acknowledged that morale at the company could be better but that its 4,000 employees remained focused on building and improving Facebook's products.
"We are obviously in a tough cycle now ... that doesn't help morale," he said.
The 1 billion user count is up from the end of June, when it had 955 million active monthly users.
Zuckerberg, Chief Operating Officer Sheryl Sandberg and board member Marc Andreessen have been courting investors this week with appearances on the CNBC business channel and on panels at a high-profile advertising conference in New York. It also unveiled a video touting Facebook's connection with people across the world.
Facebook has rolled out a spate of initiatives to spur more growth, including a new advertising platform and measurement methods to show companies they are getting their money's worth with Facebook ads.
The company also said on Thursday it has seen 1.13 trillion "likes," or endorsements by users, since it launched the feature in February 2009. Many advertising campaigns that companies conduct on Facebook are designed to garner "likes."
Analysts were not surprised by the timing of the milestone. Hudson Square analyst Dan Ernst said Wall Street had expected Facebook to hit 1 billion in the third quarter.
But it still faces the task of making money from its user base, Ernst said. "The key, of course, is monetization of those users," Ernst said.
The median age of a Facebook user was 22, it said, and the top five user countries were Brazil, India, Indonesia, Mexico and the United States.
The new data came a day after the company said it was letting U.S. users pay a fee to boost the visibility of their postings - the latest effort to look beyond advertising for revenue.
Advertising accounted for roughly 84 percent of the total revenue in the second quarter.
With Facebook's revenue growth rate slowing sharply in recent quarters, analysts and investors believe it needs to find new ways to make money and Facebook has been rolling out new products to generate revenue.
Last week, Facebook unveiled a feature that lets U.S. users buy and send gifts such as eyeglasses, pastries and gift cards to friends, signaling its intent to play a bigger role in e-commerce.
Facebook rose 0.6 percent to $21.97 in early trading on Thursday.
Celebrating a billion people is very special to me. It's a moment to honor the people we serve.
For the first time in our history, we've made a brand video to express what our place is on this earth.
We believe that the need to open up and connect is what makes us human. It's what brings us together. It's what brings meaning to our lives.
Facebook isn't the first thing people have made to help us connect. We belong to a rich tradition of people making things that bring us together.
Today, we honor this tradition.
We honor the humanity of the people we serve.
We honor the everyday things people have always made to bring us together:
Chairs, doorbells, airplanes, bridges, games. These are all things that connect us.
And now Facebook is a part of this tradition of things that connect us too.
I hope you enjoy this video as much as we do.
Thanks for helping connect a billion people.
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