While there was no official confirmation, highly-placed sources indicated the group has decided to make this recommendation to the cabinet.

After chairing the meeting, Planning Commission deputy chairman Jaswant Singh said, "The group has reached a unanimous decision, and it will be conveyed to the cabinet."

He added that the meeting considered all the issues posed by the cabinet on allowing foreign equity participation in the domestic insurance sector.

The hour-long meeting was also attended by industry minister Sikandar Bakht, finance minister Yashwant Sinha, law and justice minister Thambi Durai, minister of state for finance KMR Janarthanan and commerce minister Ramakrishna Hegde.

The government has already decided toopen the insurance sector to the Indian private sector, but the issue that was being considered pertained to the quantum of foreign equity participation while opening up the sector.

According to sources, the proposal which found favour with the group was to allow up to 26 per cent foreign equity participation and 40 per cent to financial institutions in the joint-venture companies. The recommendation, however, will have to ratified by the cabinet.

Singh, who refused to divulge the details of the proposals, had said that the IRA Bill would come up in the winter session of Parliament. He added, "I hope it would as there is a sense of urgency to revive the insurance sector."

To a question if some ministers, including a human resources development minister, had been dropped from the group, he said the group had been neither expanded nor contracted since its constitution by prime minister Atal Behari Vajpayee. The group had been formed to look into the specific issue of foreign equity participation in theinsurance sector.

Earlier in the day, at an international conference, finance minister Sinha had stressed, "We have not lost any time. There are certain loose ends which still need to be tied up. We would be ready with the legislation before the next session of Parliament."

Sinha said since the insurance sector was a state monopoly, long-term funding of infrastructure projects had been missing. "We shall open the insurance sector for the private sector to facilitate investments in infrastructure development," he added.

The IRA Bill, which had been aborted once when the then finance minister P Chidambaram failed to secure enough members to push it through in the Lok Sabha, will have to be introduced again in Parliament for consideration and approval.

Although the IRA Bill will set the ground rules for private participation in the insurance sector, the government will have to simultaneously amend the Life Insurance Corporation Act 1956 and General Insurance Business (Nationalisation) Act 1972 to end themonopoly of the state-owned companies to permit private players to underwrite business.