The wait is over for everybody regarding the Union Budget 2021. Although 2020 made a brutal impact on every economy but, many reforms also took place simultaneously.
As India really maintained comparatively good position along with many good reforms, it directly increased the hopes regarding the Union Budget 2021.
As everybody had a lot of expectations regarding the budget so, the budget also seems to fulfil all the hopes on the same.
The Finance Minister Nirmala Sitharaman announced in her speech that the FDI limit will now be increased to 74 percent.
However, this will come in effect after the amendment of Insurance Laws (Amendment) Act 2015 in the Parliament.
She also added that a majority of board of directors of these insurance companies have to be Indian residents.
Although, this amendment seems to be abided by a previous clause made back in 2015. This was with the injection of a clause at the time of 49 percent insurance FDI limit came into existence.
Also, the Indian Management Control clause was inserted in the 2015 act when 49 percent hike was implemented in the FDI.
It said that everything will be done in the Insurance companies only with majority of Indian shareholders. It also added more that they must give their consent.
However, this amendment is nothing new, it came with the BJP government coming into power in 2019.
BJP made the first proposal to increase the insurance FDI limit to 74 percent in 2019. It was to ensure additional investment in the declining insurance sector.
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