New Delhi (NVI): In her Budget 2021-22 speech today, Finance Minister Nirmala Sitharaman proposed that foreign investment limit in the insurance space will be increased from the current 49% to 74%.
Raising of the FDI cap in the insurance sector in India was a long-standing demand by several countries, including the US.
In her Budget speech, the FM proposed to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49% to 74% and allow foreign ownership and control with safeguards.
Under the new structure, the majority of Directors on the Board and key management persons would be resident Indians, with at least 50% of Directors being Independent Directors, and specified percentage of profits being retained as general reserve.
Disinvestment and Strategic Sale
In spite of COVID-19, Government has kept working towards strategic disinvestment. The Finance Minister, in her Budget speech, said a number of transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited among others would be completed in 2021-22. Other than IDBI Bank, Government propose to take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22.
In 2021-22, Government would also bring the IPO of LIC for which the requisite amendments will be made in this Session itself.
In a very important announcement, the Finance Minister said that in the AtmaNirbhar Package, she had announced to come out with a policy of strategic disinvestment of public sector enterprises and said that the Government has approved the said policy.
The policy provides a clear roadmap for disinvestment in all non-strategic and strategic sectors. Government has kept four areas that are strategic where bare minimum CPSEs will be maintained and rest privatized.
In the non-strategic sectors, CPSEs will be privatised, otherwise shall be closed. She said that to fast forward the disinvestment policy, NITI Aayog will work out on the next list of Central Public Sector companies that would be taken up for strategic disinvestment. The Government has estimated Rs. 1,75,000 crore as receipts from disinvestment in BE 2020-21.
-ARK
