Lok Sabha Passes Bill To Privatise Public Insurance Companies: All We Need To Know

Amid continuous protests by opposition on the Pegasus snooping and farm laws, the Lok Sabha on Monday passed a bill to amend the general insurance law that allows the government to sell its majority stake in State-owned insurance companies, paving the way for their privatisation, NDTV reported.

According to the official sources, the General Insurance Business (Nationalisation) Amendment Bill, 2021 is amied at generating required resources from the Indian markets so that public sector general insurers can design innovative products.

Passed without any discussion in the Lok Sabha, the bill was protested by the opposition parties alleging that the government introduced the bill deliberately and has far-reaching impact.

West Bengal Finance Minister Amit Mitra wrote a letter to Union Finance Minister Nirmala Sitharaman urging her not to go ahead with the privatisation of public insurance companies, NDTV reported.

"May I express my shock and alarm at the policy decision of the Government of India venturing to privatise public sector insurance companies which are the pillars of the economy," Mr Mitra wrote in the letter.

Union Finance Minister Nirmala Sitharaman passed the bill on July 30, 2021.

"This is a very dangerous bill. It's de-nationalising the public sector general insurance companies," RSP MP N K Premachandran said.

In her budget speech, she said that two public sector banks and one general insurance company would be taken up under the central government's privatisation agenda.

As of date, there are four major State-owned insurance companies in the public sector-National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited.

What Is General Insurance Business (Nationalisation) Amendment Bill?

The bill seeks to amend the General Insurance Business (Nationalisation) Act, 1972 which will provide greater participation in the public sector insurance companies, according to Jagran Josh.

Insurance penetration and social protection will also be enhanced, besides securing the interests of the policyholders. It will also help in the faster economy growth.

The amendment bill also seeks to remove the proviso of the Act to remove the requirement that the Central Government holds not less than 51% of the equity capital in a specified insurer.

Why Is Opposition Against It?

According to the opposition, the bill aims to withdraw the need that the Central Government should not be liable for less than 51% of equity capital in a specified insurer, besides calling for greater private participation in public sector insurance companies.

Congress leader Adhir Ranjan Chowdhary termed it as anti-national and anti-people. He spoke briefly after the bill was passed in Lok Sabha.

Sitharaman, however, termed the allegations as baseless and said the government was not curbing anyone's rights. She asked the opposition to sit, debate and ask questions.

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