He said the growth of insurance sector would help bring much-needed funds for meeting India's growth aspirations.
"A much-awaited legislation will pave way for higher investments and more innovation in the insurance domain in India," Prasad added.
Industry body Confederation of Indian Industry (CII) said the passage of the Bill would have "multiplier effect on the state of economy".
"The long-awaited reform will help create a conducive environment for reviving investments and sustaining growth in the Indian insurance industry," CII said.
CII Director General Chandrajit Banerjee said that further capital infusion in the insurance sector, through greater FDI, would ensure innovations on product design and distribution, better risk management, introducing superior technology and greater investments.
Assocham President Rana Kapoor said the support of opposition parties for the Insurance Bill augurs well for reforms. Kapoor hoped that the same spirit and cooperation is extended for Coal and Land Acquisition Bill.
The Rajya Sabha on Thursday night approved the Prime Minister Narendra Modi-led government's first major economic reform measure as the long-pending Bill providing for raising foreign investment cap to 49 per cent in insurance was passed after main opposition Congress and some other parties came on board.
The controversial Insurance Laws (Amendment) Bill, 2015, which replaced an ordinance promulgated in December last, was passed by voice vote after walkout by Trinamool Congress and DMK.