RAS question
Consider the following statements about the reforms approved by the Union Cabinet on December 13, 2025: 1. The Insurance Laws (Amendment) Bill raises FDI cap to 100% in insurance. 2. The SHANTI Bill allows 100% FDI in nuclear energy. Which of the above statements is/are correct?
Correct answer: (A) 1 only.
Only the insurance reform statement is correct: the Insurance Laws amendment allows up to 100% FDI in insurance companies, while the SHANTI Bill allows only 49% FDI in the nuclear sector.
Explanation
Statement 1 is correct because the cited Press Information Bureau release says the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 allows up to 100% Foreign Direct Investment in insurance companies. The same reform is framed as a way to bring in capital, technology, global practices and more competition in insurance. Statement 2 is wrong on the percentage: the cited report on the SHANTI Bill says it proposes allowing up to 49% foreign direct investment in the nuclear sector, not 100%. So the two statements cannot both be accepted. The correct evaluation is therefore statement 1 only.
Why the other options are wrong
- (B) Option B accepts only statement 2, but the SHANTI Bill is described as allowing up to 49% FDI in the nuclear sector, not 100%.
- (C) Option C treats both statements as correct, but statement 2 overstates the SHANTI Bill's FDI limit by claiming 100% instead of 49%.
- (D) Option D rejects both statements, even though the insurance amendment is explicitly described as allowing up to 100% FDI in insurance companies.
Concept
This tests FDI liberalisation and sector-wise reform limits, a recurring Indian Economy theme in RAS because examiners often pair a correct cap with an inflated one. The key skill is to separate the sector from the exact percentage allowed.