The Insurance (Amendment) Bill, 2021 which seeks to raise the limit of foreign direct investment (FDI) in the insurance sector from 49 per cent to 74 per cent, was today passed by the Rajya Sabha after a walk-out by the Opposition.

Demanding the Bill’s reference to a Standing Committee or a Select Committee for a deeper scrutiny, and enlisting of views of all stakeholders, the Opposition led by the Congress forced several adjournments before the Bill was discussed.

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Finance Minister Nirmala Sitharaman, replying to the discussion, allayed members’ fears and said FDI was needed as the sector suffered from liquidity stress and its growth was restrained.

She said FDI was meant to supplement the country’s financial resources, and would provide the funds needed by the companies to grow and provide better penetration of services across the country. The laws of the land were mature enough to control all operations, she said.

She assured the House that citizens interests would be fully protected under the new FDI regime, and 50 per cent of the companies’ directors would be independent directors, and a specified percentage of the profits would stay in India as reserves.

The Modi government was committed to social justice and the reservation policy would continue. She said the government was only taking the reforms process forward.

Ms Sitharaman said the law itself had provided safeguards under which the FDI limit was being relaxed. She said funds of the insured persons would not be taken out of the country.

Rejecting the charge of not consulting the stakeholders, the minister said 60 insurers, besides several industry leaders, were consulted. She said insurance was a highly regulated sector, and there should not be any worries about it.

Ms Sitharaman said ever since the opening of the sector to private sector, the number of private companies had grown whereas the number of public sector companies had remained virtually stagnant. Since 2015, FDI totalling Rs 26,000 crores had come to India. The number of re-insurance companies too was going up in the private sector.

The government life and non-life insurance companies had 1.65 lakh employees and 15.45 lakh agents. The private companies on the other hand had 2.67 lakh employees and their agents were more than 21 lakh. Those engaged in the private sector were also Indians, she said.