12 Mar Increase in the FDI in Insurance sector (GS-3 Economics, Indian Express)
Posted at 12 Mar 2021 in Current Affairs, GS Paper III 0 Comments
- Why to increase:
- FDI will improve the insurance penetration, Insurance density
- Amendment in the Insurance Act 1938 which will raise the FDI limit to 74 per cent, from the current 49 per cent
- insurance penetration (estimated as a percentage of insurance premium to GDP) in India has risen from 2.71 in 2001 to 3.76 in 2019
- Country has favorable demographics
- Increase in the middle class
- Provide safeguard from adverse consequences.
- Why Low penetration
- Increase in coverage increases the cost.
- Indian companies provide a higher rate.
- Effect of Increase in the FDI
- Cost of products will come down.
- Foster the greater competition