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    Question

    The government is considering the increase in FDI limit

    and easing FDI regulations in insurance. What is the current FDI limit in insurance sector in India?
    A 20% Correct Answer Incorrect Answer
    B 25% Correct Answer Incorrect Answer
    C 49% Correct Answer Incorrect Answer
    D 51% Correct Answer Incorrect Answer
    E 74% Correct Answer Incorrect Answer

    Solution

    The FDI limit in insurance sector is currently 74%. A higher FDI limit would particularly benefit the long-term, capital-intensive life insurance business. Promoter companies need to continually invest to meet solvency requirements mandated by the regulator before the company starts generating profits. This means only deep-pocketed promoters can successfully enter and sustain operations in this sector.

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