Finance minister Nirmala Sitharaman on Monday introduced the Insurance Amendment Bill 2021 in the Rajya Sabha that seeks to increase FDI in insurance to 74 per cent from 49 per cent.

The bill which amends the Insurance Act, 1938 was approved by the Union cabinet on Wednesday.

Sitharaman had announced the higher FDI in the budget and had said the majority of directors on the board and key management persons would be resident Indians.

At least 50 per cent of the directors would be independent, while a specified percentage of profits would be retained as a general reserve.

The government has earlier allowed 100 per cent foreign direct investment in insurance intermediaries such as brokers and consultants.

Fuel in GST

Amid record-high fuel prices, Sitharaman said there was no proposal as of now to bring some fuel items under the Goods and Services Tax (GST).

‘‘At present, there is no proposal to bring crude petroleum, petrol, diesel, ATF and natural gas under GST,” Sitharaman said in a written reply to a question in the Lok Sabha.

“So far, the GST Council, in which the states are also represented, has not made any recommendation for inclusion of these goods under GST,” she said.

While the finance minister alluded to the role of states to bring petrol and diesel under GST and provide a much needed relief to the buyers, her deputy Anurag Thakur squarely put the onus on the states.

In the Lok Sabha, Thakur said the Centre was ready to consider reducing the central taxes on fuel if the states first cut their taxes on petrol and diesel.

“Aap bhi rajyon me kuchh kam kijiye, hum bhi yahan se kuchh karne ka vichar kar sakte hain (You do something in the states, we too may consider something here),” the junior finance minister said during Question Hour. “Dono ko milkar hi karna hoga (We have to do it together).”

Thakur’s comment came as he tried to evade a direct reply to YSR Congress member P.V. Midhun Reddy, who had pinned him down on the rise in taxes on fuel.

Sitharaman had sought a co-ordinated approach between the Centre and the states.

Compensation

States may face a GST compensation shortfall of Rs 3 lakh crore in the next financial year, a situation that will force them to borrow more from the markets, a report said.

The states may face a shortfall of Rs 2.7-3 lakh crore as Goods and Services Tax (GST) compensation from the Centre next fiscal.

Out of that amount, the shortfall from cess collections will be at Rs 1.6-2 lakh crore, according to an Icra report.