The Left Front is likely to take on Finance Minister P Chidambaram on the insurance bill issue. The amended bill, raising FDI limit in insurance to 74 per cent from the current 49 per cent, will be tabled in the monsoon session of Parliament.

And the government hopes the Left will be less hostile to it once the assembly elections in West Bengal are over. Even the Planning Commission, which sometimes disagrees with the Finance Ministry, is backing it fully on this one.

"I absolutely agree with the FM's view that we need to increase the FDI cap in insurance if we are to attract much needed funds in the infrastructure sector," said Montek Singh Ahluwalia, Deputy Chairman, Planning Commission.

The Indo-US forum of CEOs should be specially pleased with this. Higher FDI in insurance is among their key recommendations and NDTV has learnt the government is also looking at other proposals favourably.

For instance, sources have told NDTV that the government will request the RBI to ease restrictions on foreign banks so that they can open more branches in India. The government is also seriously considering the proposal to allow FDI in Indian private banks like ICICI.

But arriving at a political consensus on these issues is going to be a difficult task for the government. The Left feels that increasingly India's economic policies are being dictated by American interests and that is something they will not tolerate.

Reforms in the insurance sector has been high on the agenda of foreign investors and the government is keen to send the right message to the international community.

That is why despite pressure from the Left, it has already set up an inter ministerial group to finalise the blueprint for the new insurance bill.

(www.ndtvprofit.com)