Union Finance Minister Nirmala Sitharaman on Monday proposed to increase the foreign direct investment limit in the insurance sector from the existing 49% to 74%. Sitharaman made the announcement while presenting the Union Budget of 2021-’22 in the Parliament.
“I propose to amend the Insurance Act, 1938, to increase the permissible FDI limit from 49% to 74%, and allow foreign ownerships and control with safeguards,” Sitharaman said in her Budget speech. “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.”
Following the government’s amendment of the FDI policy, an increase in the investment limit in the insurance sector was one of the important demands of global investors. In February 2020, the government had amended the FDI policy to allow 100% foreign investment in insurance intermediaries, including insurance agents, web aggregators of policies and brokers.
Apart from the proposals related to FDI, Sitharaman also announced an outlay of Rs 35,000 crore for India’s coronavirus vaccination programme. She added that the Centre will make additional allocations to this fund, as and when required.
Sitharaman also announced the Aatmanirbhar Health Yojana with a budget of Rs 64,180 crore over six years. The thrust of this scheme will be the development of India’s fragile healthcare infrastructure, which has been further overburdened due to the coronavirus crisis. The resources will also be used for setting up institutes for the detection and cure of new and emerging disease, the finance minister said.