Govt approves capital infusion for 3 General Insurance firms; check other Cabinet decisions

New Delhi: The Union Cabinet (February 12), chaired by Prime Minister Narendra Modi, on Wednesday (February 12) approved the proposal for capital infusion for three Public Sector General Insurance Companies- Oriental Insurance Company Limited (OICL), National Insurance Company Limited (NICL) and United India Insurance Company Limited (UIICL), said a government statement.

The cabinet has allowed the immediate release of Rs 2500 crore in the light of the critical financial position and breach of regulatory solvency requirements of 3 PSGICs viz. OICL, NICL, and UIICL.

The Cabinet also approved several other proposals under the chairmanship of the Prime Minister. 

India-Sri Lanka pact on double taxation avoidance 

The Cabinet approves protocol amending the Agreement between India and Sri Lanka for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

Updation of the preamble text and inclusion of Principal Purpose Test, a general anti-abuse provision in the Double Taxation Avoidance Agreement (DTAA) will result in curbing tax planning strategies that exploit gaps and mismatches in tax rules, a Cabinet statement said.

The existing DTAA between India and Sri Lanka was signed on January 22, 2013 and came into force on October 22, 2013.

India and Sri Lanka are members of the inclusive framework and are required to implement the minimum standards under G-20 OECD (Organisation for Economic Cooperation and Development (OECD) BEPS (Base Erosion and Profit Shifting) action reports in respect of their DTAAs with inclusive framework countries.

The existing DTAA between India and Sri Lanka was signed on 22nd January, 2013 and entered into force on 22nd October, 2013.

India and Sri Lanka are members of the Inclusive Framework and as such are required to implement the minimum standards under G-20 OECD BEPS Action Reports in respect of their DTAAs with Inclusive Framework countries. Minimum standards under BEPS Action 6 can be met through the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) or through agreement bilaterally.

India is a signatory to the MLI. However, Sri Lanka is not a signatory to the MLI as of now. Therefore, amendment of the India-Sri Lanka DTAA bilaterally is required to update the Preamble and also to insert Principal Purpose Test (PPT) provisions to meet the minimum standards on treaty abuse under Action 6 of G-20 OECD Base Erosion & Profit Shifting (BEPS) Project.

Notably, the existing Double Taxation Avoidance Agreement (DTAA) between India and Sri Lanka was signed on 22nd January 2013 and entered into force on 22nd October 2013. India and Sri Lanka are members of the Inclusive Framework and as such are required to implement the minimum standards under G-20 OECD BEPS Action Reports in respect of their DTAAs with Inclusive Framework countries. 

India-Iceland MoU for Sustainable Fisheries Development

The cabinet was apprised of a Memorandum of Understanding (MoU) signed between India and Iceland in the field of Fisheries. The MoU was signed on 10th September 2019. The salient features of the MoU are:

-Creation of facilities for exchange of scientists and technical experts and their proper placement, especially in areas of estimating Total Allowable Catches in offshore and deep-sea areas;
-Provision of training to fisheries professionals from key fisheries institutions in the various management aspects on areas of modern fisheries management and fish processing
-Exchange of scientific literature research findings and other information.
-Exchange of experts/expertise to study the prospects of fishing.Processing and marketing of products from high seas fisheries for entrepreneurship development.