Union Minister of Information and Broadcasting Prakash Javadekar said that the government has decided to recapitalise three public sector general insurance companies by infusing Rs 2,500 crore because of their critical financial condition, PTI reported. At a press conference, the minister said the insurance firms are National Insurance Company, Oriental Insurance Company and United General Insurance Company.
Javadekar said the decision was taken to improve the solvency ratio of the companies. The solvency ratio is used to measure an enterprise’s ability to meet its debt obligations and is used often by prospective business lenders.
The minister also said the government will infuse more capital as and when required, Mint reported. “As you know the government has infused Rs 3 lakh crore into public-sector banks in the past three years,” he added. “Similarly, we will start recapitalisation of general insurance companies in tranches.”
The announcement came ahead of their proposed merger by the end of March. In January, the finance ministry had said that the merger was at an advanced stage but the proposal is yet to be taken up for approval.
The profitability of the companies is expected to improve after the merger.
‘Vivad Se Vishwas’ scheme
Javadekar said the Union Cabinet also decided to amend the “Vivad Se Vishwas” scheme, which is a dispute resolution scheme that provides opportunity to taxpayers to pay outstanding taxes and get waiver of interest and penalty. The minister said Finance Minister Nirmala Sitharaman had dialogue with stakeholders on Tuesday, following which the government decided to move the amendments.
“The whole purpose is...we have thousands of cases pending in various courts, various tribunals, about the income tax disputes,” Javadekar said. “All these tax disputes will now be covered under this Act.” He said that the scope of the Vivad Se Vishwas Bill, 2020, has therefore been enlarged and the amendments will be introduced in Parliament.
Javadekar said the Pesticide Management Bill, 2020, will also be introduced in Parliament during the Budget Session. He said this bill will protect the interests of farmers.
He added that the pesticide management is presently regulated by rules formulated in 1968, and they need immediate rewriting. He said changes to the bill were discussed in 2008 by select committees, and are now being implemented by the government.