Lok Sabha takes up Insurance Amendment Bill, 2021 for consideration, passage to increase FDI limit to 74%

The Lok Sabha has taken up the Insurance (Amendment) Bill, 2021 for consideration and passage. The Bill seeks to amend the Insurance Act, 1938 which will increase the ceiling limit of foreign investment allowed in Indian insurance companies. The Bill provides to increase the foreign direct investment limit from existing 49 percent to 74 percent. It also has a provision for the removal of restrictions on ownership and control of insurance companies.

Moving the Bill, Finance Minister Nirmala Sitharaman said that the insurance sector requires a huge and long-term investment as it is a capital-intensive sector. She said, raising the ceiling limit to 49 percent in the year 2015 has resulted foreign direct investment of 26 thousand crore rupees in the past five years. She said assets under management registered a growth of 76 percent within this period. Initiating the discussion, Manish Tewari



of Congress opposed the legislation saying that it is against the interest of small insurance holders. He said, Congress is not against liberalization but it opposes further opening up of certain sectors like insurance as it will have adverse effects for common people. He said this Bill must be seen as part of the government’s efforts to privatize banks and disinvestment of Public Sector Units.

 

He urged the government to reconsider the legislation. Shyam Singh Yadav of BSP also opposed the Bill. Jagdambika Pal of BJP said, raising the FDI limit will attract 15 thousand crore rupees worth of investment in the upcoming three years. He said it will also help in increasing the penetration of insurance and providing insurance cover to common people. Magunta Reddy of YSRCP welcomed the Bill saying that the move will increase the penetration of insurance coverage. The discussion is underway.