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"Hopefully, by the end of the year the amendments to the Insurance Act get approved by Parliament and then notified," he said at a Pension Fund Regulatory and Development Authority (PFRDA) event.
The Bill, touted as a major economic reform but pending for long due to political interests, proposes to hike composite cap of foreign investment in the insurance sector to 49% from the current 26%, with a rider that control rests in the hands of Indian promoter.
The select committee's stand on the issue of composite foreign investment cap would be crucial because other provisions of Jaitley's Bill were not different from the version proposed by the previous United Progressive Alliance (UPA) government.
Ahead of Prime Minister Narendra Modi's visit to the US, the government wanted to take up the Bill for consideration and passage in Parliament earlier this month, but the opposition, led by UPA, refused to budge from its stand that the Bill be referred to a select committee.
Jaitley said as and when the foreign investment limit in the insurance sector was increased it would also pave wave for a simultaneous hike in pension FDI.
"There is an intrinsic link between insurance and pension sector...the foreign direct investment limits in the Insurance Act automatically applies to the pension sector," he said. "Therefore additional investment coming in, more expertise coming in, more capital coming in, hopefully more funds coming in and different kinds of products competing against each other then becomes greater reality."
The Bill has been pending since 2008 in the Rajya Sabha. As many as 97 amendments were moved to the original bill by the Narendra Modi-led government last month.
Jaitley said reforms do come but they come little slowly as it had happened in the case of pension sector. He said considering that pension pay-outs, particularly unfunded and uncertain are to be borne by the public exchequer, pension reforms would mitigate this burden releasing resources for better deployment and utilisation in other social sectors.
He highlighted the need to build up corpus of funded resources to eventually act as the source for pension pay outs in future, and also as a source for financing critical sectors as infrastructure and also capital market.
"You have an element of social security and you also have channelising of all these investments into developmental activities of the society. Pension funds are one of the biggest investors globally and there is no reason why India should not strive to reach that optimum limit," Jaitley added as he launched the revamped website of the PFRDA and released the annual report of the pension fund regulator.
The finance minister asked the industry to come up with more and more new products which could compete with each other with benefit accruing to the pension subscribers.
