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Opening the door wider


ISSUE DATE: March 22, 2021
UPDATED: March 14, 2021 11:09 IST
Illustrations by Tanmoy Chakraborty
The Modi government is not looking to divest stake in Life Insurance Corporation (LIC) purely as a fiscal measure; it has also announced far-rea­ching reforms in the insurance sector in Budget 2021. Finance minister Nirmala Sitharaman proposed hiking the foreign direct investment (FDI) limit in the domestic insurance sector from the current 49 per cent to 74 per cent, a move that would attract additional capital and help insurers maintain adequate solvency margins and invest in technology and product innovations.
The government also plans to privatise one of the five general insurance companies. The Centre has said that 50 per cent of company boards (under the new FDI norms) will be independent directors, and all key people will be Indians. A specified percentage of the profits of the insurance JV will also be retained as a general reserve. ....

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Budget 2021: Industry Welcomes Insurance FDI Limit Hike To 74%; Management Control Clause Remains A Concern


Budget 2021: Industry welcomes insurance FDI limit hike to 74%; management control clause remains a concern
While announcing the proposal to hike FDI limit to 74 percent for the insurance sector, Finance Minister Nirmala Sitharaman said there would be safeguards . Keeping management control with Indians could dissuade infusion of fresh investments from abroad.
At the face of it, the proposal is a positive development for the country s insurance industry.
Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2021-22 on February 1, said the foreign direct investment (FDI) limit in India s insurance sector will be hiked to 74 percent from 49 percent.
At the face of it, the proposal is a positive development for the country s insurance industry that has been saddled with dual issues of stagnating growth amidst the COVID-19 pandemic and rising needs for capital infusion. ....

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Insurance FDI Hike: Centre May Face Opposition From Allies Over Dilution Of Swadeshi Tag


Insurance FDI hike: Centre may face opposition from allies over dilution of Swadeshi tag
There is a view that hiking the FDI limit in the insurance sector from 49 percent to 74 percent could lead to foreign partners in insurance JVs taking all major business decisions, affecting nationalist interests.
January 22, 2021 / 01:37 PM IST
Union Budget 2021 is likely to present a proposal hiking the foreign direct investment (FDI) limit in the insurance sector to 74 percent from 49 percent now. However, sources told Moneycontrol that currently several Bharatiya Janata Party (BJP) leaders as well as leaders from its NDA allies are not fully convinced about the FDI hike. ....

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