Budget 2021: Investors alert! Big announcement! Modi government will introduce this to protect your rights

Budget 2021 Investor Charter: Presenting the Union Budget 2021-22, Union Finance Minister Nirmala Sitharaman on Monday confirmed that Modi government will introduce investor charter as a right of all financial investors across all financial products.

Moreover, the government on Monday proposed to increase foreign direct investment (FDI) limit in the insurance sector to 74 per cent, a move aimed at attracting greater overseas capital inflows to help enhance insurance penetration in the country.

In the first paperless Union Budget, Finance Minister Nirmala Sitharaman said under the new structure, the majority of directors on the board and key management persons would be resident Indians, with at least 50 per cent of directors being independent directors, and specified percentage of profits being retained as a general reserve.

"I propose to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49 per cent to 74 per cent in insurance companies and allow foreign ownership and control with safeguards," she said while presenting the Budget 2021-22.

It was in 2015 when the government hiked the FDI cap in the insurance sector from 26 per cent to 49 per cent.

Life insurance penetration in the country is 3.6 per cent of the GDP, way below the global average of 7.13 per cent, and in case of general insurance, it is even worse at 0.94 per cent of GDP, as against the world average of 2.88 per cent.

The government had earlier allowed 100 per cent foreign direct investment in insurance intermediaries.
Intermediary services include insurance brokers, reinsurance brokers, insurance consultants, corporate agents, third party administrators, surveyors and loss assessors.