18.27 hrs.
Title: Consideration of the General Insurance Business (Nationalisation) Amendment Bill, 2001 (Not concluded).
SHRI S.S. PALANIMANICKAM (THANJAVUR): Sir, as per the decision of the Business Advisory Committee, we can take up the Bill now. Otherwise we cannot complete the business in this Session.
SHRI T.M. SELVAGANPATHI (SALEM): The interests of the insurance workers are involved. … (Interruptions) The Bills cannot be bulldozed in this fashion. These two Bills are very important Bills. We need more time to discuss this Bill.
SHRI MADHUSUDAN MISTRY (SABARKANTHA): Sir, we need time for preparing for the discussion.
SHRI T.M. SELVAGANPATHI : Sir, this Bill concerns several lakhs of insurance employees.
SHRI K.H. MUNIYAPPA : Sir, we need more time. This can be taken up tomorrow.
SHRI S.S. PALANIMANICKAM : Sir, the Business Advisory Committee decided that the House would sit upto 8 p.m.
SHRI MADHUSUDAN MISTRY : You have expressed the feelings of the Business Advisory Committee. We are expressing our view. This is a very important Bill. It can be taken up tomorrow. We need to have a thorough discussion on this. This Bill requires a detailed study.
SHRI K.H. MUNIYAPPA : Sir, let it be taken up tomorrow.
श्री थावरचन्द गेहलोत (शाजापुर):महोदय, आइटम संख्या १५ और १६ – जनरल इंशोरेंस और इंशोरेस – एक साथ ले लीजिए।…( व्यवधान)
श्री प्रियरंजन दासमुंशी (रायगंज) : नहीं । We have objection to it. दोनों बिल्स पर अलग-अलग बहस होगी, क्योंकि दोनों ही महत्वपूर्ण हैं। डिलकिंग सब्सिडियरीज से संबंधित है, इसलिए जल्दबाजी में पास नहीं करेंगे। माननीय सदस्यों के सुझाव भी आयेंगे।…( व्यवधान)
सभापति महोदय : इस विधेयक पर तीन घन्टे बहस होनी है। सभा की सहमति नहीं बन रही है और बीच में पंचायत यह हुई कि इसकी शुरुआत हो जाए और यह कल ही पास हो।
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI BALASAHEB VIKHE PATIL): Sir, I beg to move:
“That the Bill further to amend the General Insurance Business (Nationalisation) Act, 1972, be taken into consideration.”
SHRI PRIYA RANJAN DASMUNSI : Sir, hon. Member Shri Rupchand Pal may be allowed to speak today. We will speak tomorrow.
MR. CHAIRMAN : Motion moved:
“That the Bill further to amend the General Insurance Business (Nationalisation) Act, 1972, be taken into consideration.”
MR. CHAIRMAN : Shri Madhusudan Mistry.
SHRI MADHUSUDAN MISTRY : Sir, this is a very important Bill. We have just got it and I have not prepared. So, I will speak tomorrow.
MR. CHAIRMAN: Shri Rupchand Pal.
SHRI RUPCHAND PAL (HOOGLY): Mr. Chairman, Sir, the General Insurance Business (Nationalisation) Amendment Bill has a long history. When it was first introduced, I had raised a serious objection to the discussion of the Bill on two counts. First, even before the Bill had been brought for the consideration of this House, by an Executive Order, the Government – I mean the Insurance Division of the Ministry of Finance – had started implementing the demerger process of the four subsidiaries of the holding company, General Insurance Corporation of India Limited — Oriental Insurance Company, National Insurance Company, United India Insurance Company and New India Assurance Company. This was a subject of serious criticism by the Committee on Subordinate Legislation of the other House, but that is a different story. I am not, right now, going into those issues.
Sir, when the Bill to open up the insurance sector was considered, I had opposed the Bill saying that this was a disastrous step by the Government of India in the name of reforms, in the name of liberalisation and that it would bring about serious consequences for our economy because it would lead to pre-nationalisation days when the public money was looted and the national savings were misused like anything. Very rightly, the insurance sector was nationalised and since then, this sector has contributed immensely, rather historically to the economic development of the nation. Even during the Ninth Plan, no less than one lakh crores of rupees were made available for the infrastructure of this country and for various other planned development activities, but still, without listening to the sane voices of different sections of the society, the jurists, the economists, the trade unions and even the management of the insurance sector, they have brought this Bill. I had been associated with a Committee which examined the Bill at that time and I had been ultimately compelled to give my note of dissent, which some of the Members might have gone through. The management themselves had stated that this was not the right step in the national interest, not to speak of very many other important people.
This IRDA Bill still got passed because of the sheer arithmetic that was then obtaining in this House. Indian professionals in the insurance sector are far more superior to others who are operating in this sector in this country. In spite of a lack of a level playing field, in spite of the inconvenience that they have been put to, the Life Insurance Corporation is performing well and is continuing to grow with new policies and in new extended areas of operation.
Sir, the General Insurance Corporation, with all its subsidiaries, had not only been performing well but they could even be compared to be at par with some of the best in the world in terms of claim settlement, in terms of providing service to the people and even in terms of the quality of their products. But the Government has its own policies which, sometimes, put this organisation to serious difficulties. I would not like to go into those details at this point of time.
Sir, the Government, after having opened up the insurance sector, decided that the subsidiaries of the General Insurance Corporation should now be de-linked and de-merged. Why is it so? I have been repeatedly asking this question. Merger has been the buzz word world-over now. The Tata group of industries got themselves merged with another entity; the one wing of the Reliance group of industries is getting itself merged with another wing. Big merger of companies are taking place all over the world. M/s Compaq got merged with M/s Hewlett Packard. So, there is merger of companies the world over. But here is a case when a merged entity, that has got the financial strength to compete in the new environment and can offer a steep competition to the private sector entities in the field, is being tried to be weakened by this Government because the private sector cannot compete with this public sector organisation. This is the most tragic part of it. The Government itself is weakening its own agency that has been serving the nation for the last several decades. This was never done before.
Sir, what is the argument of the Government? The argument is that the Government wants to have a re-insurer, an exclusive re-insurance company. Why is it necessary and what is a re-insurance company? The Government wants to have a re-insurance with foreign companies for larger risk management. In spite of performing the role of a re-insurer, the General Insurance Company can well continue as an insurance company. But it is not being allowed to do this.
Sir, we have various important Committees in our Parliament like the Committee on Public Undertakings and others. I had submitted to the Government, on the first occasion against the opening up of the insurance sector, a petition with signatures of around one crore and fifty lakhs people. That petition contained signatures of Ministers, of eminent leaders who are supporters of this Government and they subscribed to the view, as contained in that petition, that the insurance sector should not be opened up to private sector.
Sir, in the United States of America where there are 50 provinces and there are 50 laws, the entry of even friendly countries into the insurance sector is scrutinised by each of these provinces under their laws separately. But in our country we are inviting them and after they have come when it is seen that they cannot compete with our agencies, our own organisations, the Government is trying to weaken our organisations for their benefit. This is the most unfortunate part.
This is the most unfortunate part. The top management of GICI was asked to direct its subsidiaries to function independently from a given date and delink themselves from the authority of GICI. Ultimately, when the management did not agree to it, the wording was changed.
I would like to ask the Government whether the views of the GICI management were taken into account at any point of time in this regard. Did the Government seek the views of GICI on what should or should not be done with regard to re-insurance, with regard to insurance and its products, and how they all put together could offer better competition and better products? No. Our own professionals who have built up this insurance sector from the scratch, have no authority! How much money had the Government given them at that point of time? It was Rs.5 crore as paid up capital and another small amount loan and it was repaid long back.
The Committee on Public Undertakings – whose Chairman is Prof. Vijay Kumar Malhotra, the Chief Whip of BJP – had after meeting the management, the trade unions and all related to this insurance industry, stated that they were of the unanimous opinion that this de-merger should not take place as this would weaken the insurance sector. Still it is being done. To serve whose purpose? It is being said that re-insurance is a very complicated thing. Who does not know it? If re-insurance is a complicated thing, whose opinion has to be sought? Of a bureaucrat, who does not know anything about re-insurance? I am not referring to anyone. It is a very complex thing. It is a bureaucrat who is giving the final opinion on the decision, and not the professionals who are respected the world over as insurance specialists. I have gone through any number of in-house journals where the Managing Directors and the Chairmen of all these organisations came out openly against this. If you have anything to say about the shortcomings, about the lacunae, about the improvements that are required there, they may be suggested.
The Government is undoing its own creations and weakening its own organisations to serve the purposes of some private agencies who might be exerting influence on important quarters, after all these years, without any sanction of Parliament. It is an Act of Parliament. It is a denial of the rights of Parliament, denigration of the authority and honour of Parliament, that an Act of Parliament is being ignored.
The executive decisions have been taken without the approval of this august House. It was criticised by the Committee on Subordinate Legislation also. So, this Government owes an explanation to this House as to why did they do so. What was the hurry?
Sir, even after taking these executive decisions, for how long they had to wait to take up the nitty-gritties of the other related rules and all these things?
