Finance Minister Nirmala Sitharaman said in the budget speech for the financial year 2020-21 that the government may increase the FDI limit in the insurance and pension sector.
The government is considering increasing the FDI limit in the insurance and pension sector. At present, the FDI limit in these sectors is 49 percent. The government can allow 74 percent FDI in both these sectors on the lines of FDI limit in private banks.
The proposal was put in the last budget speech
According to sources, the government wants to increase FDI investment limit to increase new capital investment in insurance and pension sector. But management wants to keep control in the hands of Indians. Finance Minister Nirmala Sitharaman said in the budget speech for the financial year 2020-21 that the government may increase the FDI limit in the insurance and pension sector. The Insurance Regulatory and Development Authority of India (IRDA) has also supported the proposal to raise the FDI limit to 74 per cent in the insurance sector.
Facilitation in government disinvestment program
However, to increase the FDI limit to 74 in insurance and pension sector, political consensus will be required. For this, the Insurance Act will have to be amended. On the one hand, the government’s move will help insurance companies to get more capital, while the government’s disinvestment program will also get a boost. The government wants to sell its stake in general insurance companies. Foreign investors can get good value for this stake.
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