Sir, finally, insurance is a unique industry. It is different from other industries and services and so it has been kept out of the WTO. May I know from the hon. Minister whether it is a fact that insurance market is a very very protected market in the developed countries? Is there any possibility of having some reciprocity in this area for the LICI & GICI?

SHRI TARIT BARAN TOPDAR (BARRACKPORE): Sir, it has been said that stakes would be higher if the financial sector, especially the insurance sector is opened up. It has been kept open for the foreign companies to compete and mobilise resources.

MR. DEPUTY-SPEAKER: Shri Topdar, you are seeking a clarification and not making a speech.

SHRI TARIT BARAN TOPDAR : Sir, I am seeking clarification only. Is it the idea of the Ruling Party that Indians are not capable enough to mobilise resources and do good for the country? Now, Indian money would be collected by the foreigners and would be invested here. They would not bring in any money from their countries for investment here. This is what has been explained here.

MR. DEPUTY-SPEAKER: Shri Topdar, you are making a speech. You seek your clarification.

SHRI TARIT BARAN TOPDAR : Sir, I would like to know from the hon. Minister whether a similar type of competition would be allowed for the Indian companies in foreign market, and whether the Government of India could give an assurance that no money and no resources would be taken away by these foreign companies. I would also like to know whether there exists a foolproof mechanism for this or not.

SHRI MADHAVRAO SCINDIA : Sir, I would like to seek a clarification from the hon. Finance Minister. I would also like to repeat that I have received an informal legal opinion in this regard and that is why, I am trying to draw your attention.

Sir, the definition of foreign companies, under clause 23(A) under section 2(A) of the Income Tax Act, does not include all potential foreign sources. For instance, 26 per cent of foreign equity does not cover, for example, all categories of contributions which could be sourced into India from foreign sources. This is, of course, an informal, legal opinion and I would like you to check on this.

Sir, for example, if you follow the definition strictly, then equity holdings by even NRIs beyond 26 per cent would not be barred under the present Bill. Similarly, several other persons or entities, like a foreign national, a foreign citizen, a foreign trust, a foreign trade union or a foreign association of persons including a foreign off-shore entity, so long as it is not a foreign company or its subsidiary, would be entitled to hold equity in excess of 26 per cent in the Indian insurance company.

I would like the hon. Finance Minister to be doubly sure about this. I am just cautioning him on this. If this is truly the case, he should take steps to ensure that this loophole is totally be plugged. Otherwise it will not be a loophole, it will be a wide gaping hole into which anyone can ride.

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x nںɮ |lx ɽ E l E .E., .B.B. <ƶƺ E{xV E <ƶڮ + ɮ b E ʱB <xɴ]-|]Ex BE] E iɽi BE <xɴ]-|]Ex b i * +Mɮ ɮEɮ <E xi n, i <E ɮ xxҪ j ɽn {ɹ] E*

DR. SAROJA V. (RASIPURAM): Hon. Deputy-Speaker, Sir, I would like to know from the Minister whether, under the health insurance scheme, the private insurance companies would come forward to set up accident-cum-emergency wards along with fullfledged blood banks along the national highways to save the victims of road accidents.

xɮɪh nii iɴɮ (xxiɱ) : Ҩx, xxҪ ʴii j V n ʤxn+ {ɮ {ɹ]Eh E +{I EM* =xx Eɱ B.+<.. + V.+<.. E ɮ < |Eɮ E ]{{h E E n |iɶi lc +vE VxɺJ {ɮ + iE <ƶƺ EҨ E M E V E + ɮi E BE ɽi c Ij, ɮi E ɽֺJ +ɤn + iE <ƶƺ E] E ɦ Si + ɱj E] E ʮ{] E n ix ɹ E n V ɮEɮ ExpҪ ɮEɮ uɮ ɽ Sxi E Vi + +V <ix c Fi E vɨ +{ < ʤɱ E x , i E n E ɽֺJ Vxi E <E ɦ {ɽS, <E ʱB ɺiʴE { ɮEɮ E E hxi ? MɮҤ iE <ƶƺ E ɦ E {ɽSM?

+vI ɽn, B.+<.. + V.+<.. E ɮ E Mɪ E M`xE { x< iExE + iE <xɨ xɽ +< + Ei E E <xɨ E x< iExE < VBM* ɽn, ɽ c Jn E ʴɹɪ E ɮ B.+<.. + V.+<.. V ʴii jɱɪ E +vx , =xE , MɴxǨ] E +vx i B, , x< iExE iE xɽ {ɽS E* V x< iExE Fi <ƶƺ E Ij ɮ nxɪ +< , =ɺ <x nx E{xɪ E +Mi Ex |ʮi Ex E ʱB, =xɺ +xY{i Ex E ʱB, < ʤɱ E {ɺ x E n ɮEɮ E E hxi M, E ʺli M; E <x nx ʤxn+ E +{ {ɹ] EM?

x ɴɱ (֨< nIh-v) : +vI ɽn, < <ƶƺ + Vxɮ <ƶƺ E{xɪ x V { V ɮEɮ Ij E =tM Mɪ + , = |Eɮ < ʤɱ E {ɺ x E n E ɮx E E{xɪ E V E =tM vx Mx E ɴɺl E |ɴvx EM iE < n E vx E ɽ x V E + < n E vx < n ? E ɮEɮ < ɮ E< xi xBM?

SHRI BASU DEB ACHARIA : Sir, now the 50 per cent of the business done by the LIC and the GIC is from the rural sector which is not profitable. And, because of cross-subsidization, the LIC and the GIC both the public sector undertakings are doing well for years together since their nationalisation. Now, when the foreign companies are invited, insurance sector will be opened up to the foreign countries. Is there any safeguard in this Bill that the foreign companies will enter into the non-profitable areas instead of profitable areas?

SHRI P.H. PANDIYAN : Mr. Deputy-Speaker, Sir, I want to have clarifications from the hon. Minister on two things. Yesterday, I made a reference that foreign firms are standing in the queue to engage Indian partners in the Insurance sector. For example, Allianz AG Company of Germany is looking for the Indian partners. Similarly, the Alpic Finance, Prudential Life Insurance of U.K., ICICI, American International Group of U.S., Tata Group, Hindustan Times Group, General Accidents of U.K., Bombay Dying are also there.

MR. DEPUTY-SPEAKER: Shri P.H. Pandiyan, all these names were referred to in your speech also. You seek clarification now.

SHRI P.H. PANDIYAN (TIRUNELVELI): Sir, the hon. Minister while replying has stated that `it is not open to foreign companies at all.' Why did he not refer to these companies who are looking for the Indian partners? The Indian partners have been specified and it has been reported in the Press also.

At this juncture, I would like to say that the same principle will apply to the nationalisation of banks. What was the public interest in 1969 while nationalising the banks? Is it private interest today?

Sir, it has appeared in the Press and through the Government also that they are going to initiate a deal to denationalise all the banks. So, what is the purpose behind this denationalisation? The Minister has said that he has been described as anti-national. When you are denationalising any sector, it is anti-national. You nationalised banks in 1969 and you are appreciated. If you are denationalising those banks, what is the actual meaning?... (Interruptions)

SHRI P.C. THOMAS (MUVATTUPUZHA): Sir, in his speech, the hon. Minister has said that there is no pressure from anywhere, but in the Agreement of W.T.O., the Service sector is included. Once, the Service sector is included, we are dutybound, and therefore, we cannot say that we need not open up. So, I think, there is a pressure by way of contract which we have entered into.

So, I would like to seek a clarification as to whether the Government will take action in the Seattle meeting which is going to take place two or three days farther to see that in the case of developing countries, we may not have to hasten to go in for the privatisation or have contracts in this nature. We would like to take some more time, if necessary.

My second point, which has already been made, is with regard to the insurance which may be made by the people as against some insurance companies which may be fake insurance companies and come in in the name of foreign companies.

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|Eɶ . {]ұ (Mɱ) : +{E vɨ j V Vxx Sɽi E V ɮ ʱbM E{x x E , =ɨ ɮ ʱbM E l-l ɮi E ɽ 2000 Ec EU <ɺ EU Vn b{V] ʤɱ<V Ex ɱ * ɽ Vxx Sɽi E E{xɪ n E iɮ Eɨ Ex ɱ ɽ Vx ɱ ?

SHRI PRAKASH YASHWANT AMBEDKAR (AKOLA): The foreign equity has been kept at 26 per cent. May I know from the hon. Minister whether this will be limited to one company or, if there is one company which is in other part of the world and if there are many tiers in this country and if they tie up with the Indian companies, are you going to allow them? That is also going to be in a different manner in which the Indian companies will be taken over by the other countries.

The second point is, when the nationalisation has taken place, there was an issue that was raised about the premium which was used for different purposes. What for was it meant? Will the hon. Minister clarify that this time he is going to take precaution to see that the premium which was meant for some purposes will not be used again this time for some other purposes?

SHRI M.V.V.S. MURTHI (VISAKHAPATNAM): I think because of this, there could be some shrinkage in employment.There should not be any shrinkage in employment because some top officers or some more officers may likely to leave the LIC and GIC and join other companies. These posts have to be filled in by new blood so that employment is assured to the people of India in the existing companies.

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SHRIMATI GEETA MUKHERJEE (PANSKURA): I want to know from the hon. Minister whether there is any guarantee after the sector is opened that the premium will not go up as the private companies will be interested in their own profit. Is there any guarantee for that? So far as I understand, there is not. Is it not so?

DR. B.B. RAMAIAH (ELURU): In the case of Andhra Pradesh, the State Government is putting a premium on huts of the weaker sections of the people. Will the Finance Minister put a clause that a part of the premium will be used for social obligations?

ɨ xMx ʨɸ ({bx) : xxҪ ={vI ɽn, < i E +ɶE , ɽ E V E ʴn E E{xɪ ɽ +E Ҩ Ij Eɨ EM + ɮ {ɪ < n JS E nM i Ex B J M E ɮ {ɪ E ɽ {ɮ JM, ɽ {ɮ JS EM? Ei E V ʴn EV i , = {ɮ ʴn E <]] ni E xɽ? < i E +ɶE E ʴn E V E{xɪ ɽ +BM, V ɽ {ɮ +{x Eɮɮ EM, =ɺ V xɡ {BM, +{x n VBM* <E ɮ E Ex ?

... (Interruptions)

MR. DEPUTY-SPEAKER: Order please. This is a very important measure. Everybody who wants to seek a clarification must get an opportunity.

SHRI ADHI SHANKAR (CUDDALORE): Sir, I would like to know whether there is any reservation for the cooperative sector.

SHRI LAKSHMAN SETH (TAMLUK): Mr. Deputy-Speaker, Sir, the hon. Minister has stated that LIC and GIC will not be privatized. What is the safeguard for this? When the private players are allowed to play in the field, there will be a war between the dwarfs and the giants. How will the LIC and the GIC be protected? They will go sick. They will not be able to contest that war. I want a suitable clarification from the hon. Minister.

Secondly, as privatization is taking place gradually, how will the reservation for the SCs, the STs and the OBCs be protected? That object will be totally frustrated. I want a clarification on this also.

SHRI ADHIR CHODHARY (BERHAMPORE, WEST BENGAL): Sir, in 1956, the then Finance Minister Shri C.D. Deshmukh was quoted as saying that insurance in developing countries must be seen as an essential service

... (Interruptions)

MR. DEPUTY-SPEAKER: You are only to seek a clarification and not to give a speech.

... (Interruptions)

SHRI ADHIR CHODHARY : The private sector is habitually reluctant in meeting social obligations. So, I just want to know what measures the Government is taking so that siphoning off the money could be stopped.

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SHRI SUDIP BANDYOPADHYAY (CALCUTTA NORTH WEST): Mr. Deputy-Speaker, Sir, the hon. Minister of Finance has said that before introducing he met the Chairmen of the LIC and the GIC. But we are also concerned about the employees of the LIC and the GIC who are huge in numbers. Has the Government any plan to convene a meeting between the Government, the management and the trade unions? I would like to propose that by holding such a meeting you can send a message and direction to the employees of the LIC and the GIC. If you fail to do so, the Left Parties and particularly the CPI(M) will exploit the unions and the employees and will mislead them. You should please take care and try to hold a tripartite meeting between the management, the unions and the Government.

SHRI VARKALA RADHAKRISHNAN : Sir, in the light of the clarification sought and fear expressed by my friend, is it not prudent to withdraw the provision with regard to privatization?

SHRI MADHAVRAO SCINDIA : I would like to add to the apprehension expressed by Shrimati Geeta Mukherjee over the investment clauses. It would be inappropriate if the insurance companies are permitted to invest outside India the funds collected by way of premium. I think, it is generally more open but the section that is sought to be inserted - I think, it is 27 (c) - is ambiguous and does not specifically mention that `premium' collected from Indian policyholders shall not be invested outside India. I think, it would be desirable that the word `premium' is specifically incorporated in section 27 (c). I think, Shrimati Geeta Mukherjee will also voice this apprehension.