Govt introduces insurance bill amid huge protest

Minister of State for Finance P K Bansal on Monday introduced Insurance Bill before the Rajya Sabha after a period of four years seeking nod to raise Foreign Direct Investment (FDI) from current 26% to 49% amidst huge protest.

The Communist Party of India (Marxist) has harshly opposed the bill and alleged the UPA government to play the interest of Indian citizens, as after passing the bill, the foreign companies will get greater control over insurance policies.

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Calling it a shameless move, CPI-M Central Committee member Hari Singh Kang said, ‘It is shocking that the Congress-led government is taking this step at a time when the financial crisis in the US has exposed the pernicious practices of the insurance and financial companies of the west.’

This act of congress led government would harm the country and import crisis in our system too, added Kang, and announced full support to the strike on December 23 called by the insurance employees against the bill.

Earlier, UPA government had presented the insurance bill in 2005 before the Lok Sabha, the lower house of Indian Parliament, which was passed amid high drama and protest of left parties.

The proposed bill is seeking to amend Life Insurance Corporation Act 1956, in which the fund raising of Indian insurance companies including life insurance and non-life insurance will be raised from current Rs.5-crore of capital to Rs.100-crore of capital making parity with private insurance companies for which Rs.100-crore of capital is essential to begin the business as per Insurance Regulatory Development Authority (IRDA) norm, sources said.