The two bills that are brought in by FM are- National Bank for Financing Infrastructure and Development Bill, 2021 and the Insurance (Amendment) Bill, 2021.
Main Aim of the Two Bills
The Development Bill aims that in India, it will support the development of long-term non-recourse infrastructure financing which includes the development of the bonds and derivatives markets that are necessary for the infrastructure financing. And the Insurance Bill of 2021 aims to increase the FDI from the current 49% to 74%.
Will The Two Bills Bring a New Change?
The Government is aiming to bring a new change by introducing the two bills. The Development Bill will pave the way for the setting up of a government-owned DFI. The statement of the bill said, “It aims to address market failures that stem from the long-term, low margin and risky nature of infrastructure financing. The institution shall be wholly owned by the Central Government, to begin with to foster confidence in its stability and sustainability and to raise resources at competitive rates”. Currently, the FDI limit stands at 49%. Nirmala Sitharaman after introducing the Insurance Bill said, “I propose to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49% to 74% in insurance companies”. It is estimated that though the bill is small but it has large implications.
TPT Policy Advocacy & Recommendations
- The Development Bill will boost the economic growth of the country. Even to ensure the full success of the DFIs in India, strict adherence to the legal and policy prescriptions is much needed.
- The life insurance penetration in India will also be improved to a huge extent due to the increase in FDI. It would also help the country to make a strong position in the global market by exporting their quality products and services.