CEO’s Post-Budget Reactions

Published By: The Times Of India ​

Published Date: 01-02-2021

Leaders of the insurance industry have applauded the government's plan to alter the Insurance Act of 1938 to boost FDI in insurance businesses from 49% to 74%. The new structure includes key safeguards: the majority of directors and key management must be resident Indians, at least 50% of directors must be independent and a specified percentage of profits must be retained as general reserve.

Rakesh Jain, ED and CEO of Reliance General Insurance, praised the budget's focus on healthcare accessibility. He highlighted the Pradhan Mantri Atmanirbhar Swasth Bharat Yojana as an essential step to expanding health facilities nationwide. Jain noted that increasing the FDI limit addresses a long-standing industry demand and will attract foreign investment and technical expertise, making the sector globally competitive.

He added that this move would attract more capital for business expansion and potentially boost the government's divestment program. The record allocation for road infrastructure would benefit economic activities, positioning both the insurance segment and the broader economy for growth and recovery.

Bhargav Dasgupta, MD & CEO of ICICI Lombard General Insurance, described the FDI increase as fulfilling a long-standing demand that should catalyse the industry's long-term development and growth.

Aatur Thakkar, co-founder and director at Alliance Insurance, pointed out that increased FDI limits will help expand insurance penetration, especially since insurance businesses require substantial capital. The additional capital infusion will enable growth and extend insurance coverage to grassroots levels, ultimately creating more jobs for youth.​