Budget 2021 | FDI cap hike in insurance to have long-lasting impact, says Bexley Advisors MD

We must demonstrate that capital flowing to India is put to good use, can grow and is recoverable, he writes

By Utkarsh Sinha,

India is in the fortunate position of being projected to be in a V-Shaped recovery post-Covid. Combine that with the fact that it is one of the few large economies projected to grow in the next few years, presents a phenomenal opportunity for capital gains, FII and FDI.

Budget 2021 Live on DH

Budget announcements that ease the flow of capital to India and the repatriation of gains would be very helpful. It is also critical that India sends a strong signal to the world that it represents a stable and predictable tax regime, with no retroactive taxations and punitive cess on gains, that can be a strong disincentive for investments.

We must demonstrate that capital flowing to India is put to good use, can grow and is recoverable.

Provisions against the Cairn and Vodafone rulings will send a positive signal to institutions looking to deploy capital in India

The hike in FDI cap in insurance from 49% to 74% is an initiative that will have a long-lasting impact in broadening insurance coverage in India, while also deepening the penetration of capital markets.

Since insurance companies also serve as LPs to several private equity and VC firms, we can also expect a positive impact on the levels of private investments down the road.

(The author is Managing Director at Bexley Advisors)