The government on Friday introduced a bill in Rajya Sabha to amend the Insurance Act, but Finance Minister Nirmala Sitharaman insisted that it will not lead to privatisation. Introducing the General Insurance Business (Nationalisation) Amendment Bill, 2021, Sitharaman said its passage will help generate required resources from the Indian markets so that public sector general insurers can design innovative products.
The Lok Sabha on March 22 passed The Insurance (Amendment) Bill, 2021 which seeks to raise the limit for Foreign Direct Investment (FDI) in insurance companies from 49% to 74%. The Bill had earlier been cleared by the Rajya Sabha and now requires Presidential assent to become law.
Many opposition members had opposed the introduction of the bill, mentioning that it will bring in foreign investors and entail total privatisation of PSU general insurance companies. Sitharaman said, “The apprehensions mentioned by the members are not well-founded at all. What we are trying to do in this is not to privatise. We are bringing some enabling provision so that the Government can bring in public, Indian citizens, and common people's participation in the general insurance companies”.
As on date, there are four general insurance companies in the public sector namely National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited. Now, one of these will be privatised for which the Government is yet to finalise the name.
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