ALL INDIA INSURANCE EMPLOYEES’ ASSOCIATION
LIC BUILDING SECRETARIAT ROAD HYDERABAD 500063
PRESIDENT: Phone: 040-23244595
AMANULLA KHAN 040-23244596
GENERAL SECRETARY: Fax: 040-23244597
K VENU GOPAL
5th October 2012
All India Insurance Employees’ Association (AIIEA) strongly opposes the government’s decision to approve the Insurance Laws (Amendment) Bill and the PFRDA Bill which will allow the foreign finance capital to gain more control over the savings of the Indian people.
The major amendments to the insurance laws are
(1) to increase the limit of FDI in insurance sector to 49% and
(2) to disinvest the public sector general insurance companies.
These moves are against the interest of the national economy and against the interests of the people whose savings are involved in insurance and pensions. Increase in FDI would lead to the increased control of the foreign finance capital over the savings of the people of india.
The Parliamentary Standing Committee on Finance said in its report placed before the Parliament on 13th December 2011 that there was no need to increase the limit of FDI to 49% as “the government seems to have decided upon this issue without any sound and objective analysis of the insurance sector following liberalization”. Cautioning the government of the global financial crisis, the Committee has recommended to the government that the private companies may explore avenues to tap the domestic capital instead of increasing the FDI limits.
When this is the unanimous recommendation of the Parliamentary Standing Committee, the cabinet decision to hike the FDI in insurance sector to 49% is clearly against all democratic norms and this is done only to appease the international finance capital.
The FDI which came into India in Insurance Sector during the ten year period of 2001-2011 is a mere Rs.6,813 crores as equity in 33 private insurance companies.
As against this, LIC alone provided for Rs.7,04,151 crores into social sector and infrastructure sector during the eleventh five year plan (2007-12). This clearly proves that “for the growth of any developing econmy, people’s savings are a much better alternative than the foreign investments.”
The insurance penetration in India is led by the Public Sector LIC. The insurance penetration level in India is at 4.4% as against the insurance penetration of level of 3.5% in USA and the world average of 4%. There is no truth in the argument that FDI increase would help insurance penetration. Insurance penetration is always proportional to the disposable income levels of the people.
The Insurance Laws (Amendment) Bill also provides for disinvestment of the Public Sector General Insurance Companies. AIIEA opposes this move since it would weaken the PSU General Insurance Companies and their strength to take up the social responsibilities. Instead the government should merge the four PSU general insurance companies and make them a single monolithic corporation to meet the goals set by the government.
Insurance employees across the country today staged protest demonstrations and opposed the moves of the government.
Insurance employees under the banner of AIIEA also decided to launch a one day nation-wide strike if the government proceeds with enacting the Bill in the Parliament.
(K. VENU GOPAL)