The government plans to raise the foreign direct investment limit in insurance to 49 per cent from 26 per cent, a senior finance ministry official said on Monday, in a further move to liberalise the fast-growing sector.

"This is our plan. This requires legislative changes. The stake will be increased as and when Parliament approves it," finance secretary S Narayan told reporters. He did not elaborate.

India is keen to increase foreign investment in the sector, which is seen as having big potential in the country of more than one billion people.