Finance Minister Nirmala Sitharaman (File photo)
In the Rajya Sabha on Thursday (March 18), the proposal to increase FDI in the insurance sector to 74 percent was passed.
Sitharaman said that the insurance regulator IRDA (IRDA) has said that the investment limit will be increased keeping safety in mind. He also said that India needs a lot of capital for the insurance sector and for this, it needs to arrange long term funds.
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Appointment of Indians to most of the company’s directors and key management positionsHow will insurance companies be controlled after increasing the FDI investment limit? On this, the Finance Minister said, “Control means that most of the directors and management of the company will be appointed Indians. Some fixed percentage of the profits of the companies will be kept as General Reserve. The company will be where the law is. It will do the same. No one can finish it. ”
74% FDI is not mandatory in insurance companies
Sitharaman said that 74 percent foreign investment option is being given in insurance companies under this proposal. It is not being made mandatory. This means that companies who want to raise foreign investment up to 74 per cent can raise it, but for those who do not want it will not be a compulsion. The Finance Minister also made it clear that raising the FDI limit does not mean that this investment can be done through the automatic route. For this, the insurance companies will have to get the necessary permission.
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Opposition parties boycott the house
Meanwhile, the Congress and other opposition parties boycotted the House in protest against increasing the limit of foreign investment in the insurance sector.