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With respect to the insurance sector in India, consider the following statements:
1. FDI limit in the insurance sector has been raised to 74 percent in the 2021-22 budget.
2. Foreign ownership and control in agricultural insurance companies are not allowed.
Which of the statements given above is/are correct?
1. FDI limit in the insurance sector has been raised to 74 percent in the 2021-22 budget.
2. Foreign ownership and control in agricultural insurance companies are not allowed.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
With respect to the insurance sector in India, consider the following ...
Statement 1: FDI limit in the insurance sector has been raised to 74 percent in the 2021-22 budget.
The first statement is correct. The FDI (Foreign Direct Investment) limit in the insurance sector in India has been raised to 74 percent in the 2021-22 budget. Prior to this, the FDI limit was 49 percent. The increase in the FDI limit is aimed at attracting more foreign investment in the insurance sector and promoting its growth.
Statement 2: Foreign ownership and control in agricultural insurance companies are not allowed.
The second statement is incorrect. Foreign ownership and control in agricultural insurance companies are allowed in India. There are no specific restrictions on foreign ownership or control in the agricultural insurance sector. Foreign companies can invest in and operate agricultural insurance companies in India, subject to the applicable regulations and guidelines.
Explanation:
- The FDI limit in the insurance sector in India has been a subject of various changes over the years. In 2015, the FDI limit was increased from 26 percent to 49 percent. And in the 2021-22 budget, it was further increased to 74 percent.
- The increase in the FDI limit is aimed at attracting more foreign investment in the insurance sector, which is expected to bring in capital, technology, and expertise. This, in turn, can help in the growth and development of the insurance industry in India.
- The increase in the FDI limit to 74 percent is seen as a positive move by the government, as it can lead to increased competition, innovation, and the introduction of new products and services in the insurance sector.
- On the other hand, the second statement is incorrect. Foreign ownership and control in agricultural insurance companies are allowed in India. Agricultural insurance plays a crucial role in providing financial protection to farmers against various risks and uncertainties associated with agriculture.
- Foreign companies can invest in and operate agricultural insurance companies in India, subject to the applicable regulations and guidelines. The Insurance Regulatory and Development Authority of India (IRDAI) regulates and supervises the insurance sector in India, including agricultural insurance.
- The government has taken several initiatives to promote agricultural insurance in India, including the implementation of the Pradhan Mantri Fasal Bima Yojana (PMFBY) which is a crop insurance scheme aimed at providing affordable insurance coverage to farmers.
- In conclusion, the correct answer is option 'A' as the first statement is correct and the second statement is incorrect. The FDI limit in the insurance sector has been raised to 74 percent in the 2021-22 budget, and foreign ownership and control in agricultural insurance companies are allowed in India.
The first statement is correct. The FDI (Foreign Direct Investment) limit in the insurance sector in India has been raised to 74 percent in the 2021-22 budget. Prior to this, the FDI limit was 49 percent. The increase in the FDI limit is aimed at attracting more foreign investment in the insurance sector and promoting its growth.
Statement 2: Foreign ownership and control in agricultural insurance companies are not allowed.
The second statement is incorrect. Foreign ownership and control in agricultural insurance companies are allowed in India. There are no specific restrictions on foreign ownership or control in the agricultural insurance sector. Foreign companies can invest in and operate agricultural insurance companies in India, subject to the applicable regulations and guidelines.
Explanation:
- The FDI limit in the insurance sector in India has been a subject of various changes over the years. In 2015, the FDI limit was increased from 26 percent to 49 percent. And in the 2021-22 budget, it was further increased to 74 percent.
- The increase in the FDI limit is aimed at attracting more foreign investment in the insurance sector, which is expected to bring in capital, technology, and expertise. This, in turn, can help in the growth and development of the insurance industry in India.
- The increase in the FDI limit to 74 percent is seen as a positive move by the government, as it can lead to increased competition, innovation, and the introduction of new products and services in the insurance sector.
- On the other hand, the second statement is incorrect. Foreign ownership and control in agricultural insurance companies are allowed in India. Agricultural insurance plays a crucial role in providing financial protection to farmers against various risks and uncertainties associated with agriculture.
- Foreign companies can invest in and operate agricultural insurance companies in India, subject to the applicable regulations and guidelines. The Insurance Regulatory and Development Authority of India (IRDAI) regulates and supervises the insurance sector in India, including agricultural insurance.
- The government has taken several initiatives to promote agricultural insurance in India, including the implementation of the Pradhan Mantri Fasal Bima Yojana (PMFBY) which is a crop insurance scheme aimed at providing affordable insurance coverage to farmers.
- In conclusion, the correct answer is option 'A' as the first statement is correct and the second statement is incorrect. The FDI limit in the insurance sector has been raised to 74 percent in the 2021-22 budget, and foreign ownership and control in agricultural insurance companies are allowed in India.
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Community Answer
With respect to the insurance sector in India, consider the following ...
The insurance sector in India is well below its potential and in terms of insurance penetration and density, we are below the world average. To address this by way of competition and better insurance products, services, etc the government of India has been raising the FDI limit in the insurance sector.
In the budget 2021-22 government has raised the FDI limit in the insurance sector to 74 percent. So, statement 1 is correct.
Benefits of raising FDI in the insurance sector:
- It will lead to expansion of the insurance sector, increased penetration, a higher level of competition, and value for customers in terms of better products at a lower cost.
- The government in the budget 2021-22 has also allowed foreign ownership and control of insurance companies including agricultural insurance companies with certain safeguards. So, statement 2 is not correct.
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With respect to the insurance sector in India, consider the following statements:1. FDI limit in the insurance sector has been raised to 74 percent in the2021-22 budget.2. Foreign ownership and control in agricultural insurance companies are not allowed.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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