<b>XIII LOK SABHA DEBATES, <i> Session II (Winter Session) </i> </b>
XIII LOK SABHA DEBATES, Session II (Winter Session) Wednesday, December 1, 1999/Agrahayana 10, 1921 (Saka )

Title: Further discussion on the motion of consideration of the Insurance Regulatory and Development Authority Bill, 1999 moved by Shri Yashwant Sinha and amendments thereto moved on the 30th November, 1999. (Continued - Not concluded.)

MR. SPEAKER: The House will now take up Item No.13 - further discussion on the IRDA Bill.

SHRIMATI GEETA MUKHERJEE (PANSKURA): Mr. Speaker, Sir, today when we are discussing a Bill to open up the Insurance sector to private companies, about 2 lakh employees of LIC and GIC have gone on strike. I hope everybody knows that the employees belonging to almost all the Parties have gone on strike. The Government, I think, should take the warning that they are in a belligerent mood and rightly so. Why should they not be? I do not see any reason why the Government should not take this into consideration and instead rush through the Bill in the House. Why is the Government rushing through with the Bill?

In the Business Advisory Committee meeting held yesterday, some of the Party representatives wanted that consideration of this Bill be postponed for a few days but the Government declined their request. It is a Bill which has wider ramifications on the future economic development of the country. The Government seems to dispose of such an important Bill in a hasty and improper manner without there being proper parliamentary consideration.

Yesterday, I quoted some figures regarding the LIC and GIC contributions to Government bonds and securities. I would like to throw some more light on this. It is common knowledge that in India the public sector insurance companies, LIC and GIC, have performed extremely well in spite of not only the continuing debilitating situation of the country's economy but also the threat of their privatisation during the last several years. For example, while the world wide premium income increased by only one per cent by 1996, the inflation adjusted growth rate, in real term of LIC premium income, is about 17 per cent, nearly three times the growth rate of the Gross Domestic Product. Be it in respect of insurance cover, settlement of claims, return on investment through dividends, providing support budget through taxes and mobilisation of scarce resources for national development, both LIC and GIC have registered exceptional performances. The growth level, as well as claim settlement percentages are higher than the international experiences.

14.49 hours (Mr. Deputy-Speaker in the Chair)

Therefore, there is no justification to privatise the Insurance sector. As I pointed out yesterday, it is totally harmful to the national interest.

Insurance is not covered by WTO agreement. A number of developed as well as developing countries have opposed the inclusion of Insurance sector in the WTO regime. Therefore, there is no compulsion for the Government to open up the Insurance sector to private companies. The then Secretary of Ministry of Finance while deposing before the Petitions Committee of the other House had admitted that so far as its obligation towards WTO is concerned, there is no compulsion whatsoever to open up the Insurance sector.

According to the reports, despite stagnation in domestic savings, record growth rates in premium mobilization has been achieved. Privatisation of the insurance industry in the name of growth and competition would only weaken and jeopardies the existing potential. The private companies both Indian and foreign will operate only in profitable areas of business. Rural areas and vulnerable segments would be neglected and social orientation in providing insurance cover and investment could be completely neglected. The private companies without any social obligation will operate for profit and nothing else. Looking to the world around, it is clear that far from healthy competition a thriving cut-throat competition, mergers, acquisitions and growth of private monopolies and oligopolies will vitiate the insurance sector. The asset base of the foreign companies is so huge that it may afford to undercut the domestic companies and absorb the loss till LIC and GIC are wiped out. After having acquired the monopolistic position, the foreign corporate are sure to overcharge the customers and reap super profits. Whatever insurance support presently available for the poor people through crop insurance etc. will not be available.

Now-a-days, tendu leaves collectors, bidi workers, fishermen, etc. are enjoying subsidised insurance through low premium. Now it will also be abolished. Therefore, the opening of the insurance sector will not bring any gain to the country as a whole, leave aside the poor people of our country. The Government is claiming that the country will be flooded with additional foreign funds if the private companies are allowed to enter insurance sector. It is nothing but a hope. Therefore, IRDA Bill, 1999, instead of helping the country will harm its interest. Please let us know why the Government is so afraid to allow the Bill to be scrutinized and closely looked into by a Joint Committee. It may be a matter of months a JPC can submit its report. It could submit it in the next Session. Is the Government in a hurry because they have made a commitment to a foreign country? I appeal to the Congress Party to have a second thought and agree to send this Bill to a Joint Committee.

While concluding, I submit that there is no economic consideration for opening up of the insurance sector. That is only a political compulsion arising out of this commitment to trans-national companies that too which was given by the Finance Minister to a foreign country. We ourselves are seeing what is happening in Seattle. Instead of India leading the Third world countries for the interest of Third world countries, India is bowing its head before Mr. Bill Clinton.

This is the position and the same position is being seen in the insurance sector. We are very sorry to say that this is absolutely against the interests of our country and we refuse to become an accomplice to this crime that is being committed today. I again appeal to the Congress Party to understand that the parliamentary system is being taken for a ride. I appeal to them that they may not allow the present Government to commit this crime. For all these reasons, I want that this Bill be circulated for eliciting public opinion.

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ɽn, ii V {] , ɽ +ɶ xi E n E ʽi ɴ{ʮ * ɽ ɤ E x * ʱɥɱ<Vx E i ɮ {] x ֯ E* Vɤ VҴ Mv V E Eʤx] ]ƺ{] ʨxɺ] l iɤ ɽ i Sɱ l* ɱE ɽi B xhǪ ɮ l V ɮ {] x ɮEɮ i B EB l + Vɤ x xhǪ EB l i n ɽi ʴɮv + l* iɤ E E ɹ]ҪEh + l i EO E E Mɪ + = BE Mɱi ɺi iɪ Mɪ Ex BE nx ɽ +ɪ E EO x +{x V =xE =] E* Vɤ n E Vɺ SV E Vɰi i = n E ʱB x, ɮEɮ ii V {] ` =E V E n {U x VB, < i E vx J* +{x ɪn+ + {ɮ{ɮ+ E x n* Ex ɮ nxɪ BE n Sɱ + = n lc {U VB i =ɺ n E xEx * < ʺrxi E E 1991 Vɤ ɮ ɮEɮ x i M x ʱɥɱ<Vx E i Sɱ E* = ɨɪn <E ʴɮv +* +V Vɺ ʴɹɪ {ɮ i E <ɨ ʴɮv * Ex SS< ɽ E V < ʤɱ E E + =xE Vɤڮ * ɮ < V S ` n Sɽi E ɽ {ɺ VB Ex V +Mƺ] ] ɮ l Vc * x n ʱɥɱ<Vx E ֯+i E l* ɽ SS i E Vɤ ʱɥɱ<Vx + i =ɨ EU Jʨɪ * ɽ xɽ Ei E ɮ En ɽ =` + =ɨ ɡi ʨɱ* ɮ EU En Jʨɪ + Vɤ E< xɪ En =`ɪ Vi i Jʨɪ +ʽi-+ʽi {i Mi * Vɤ ʱɥɱ<Vx E i Sɱ l i n E ʱB BE xɪ En l* ɮ ɮEɮ x Eʶɶ E + =ɨ V En =`B ɽ x +{x ɨZ `E =`B Ex =ɨ Jʨɪ M, =x Jʨɪ E +ʽi-+ʽi nڮ E VB + n E ʽi V Vɰ En ɽ =`ɪ VB* ɮ {] iɦn , < ʴɹɪ {ɮ ɮ {] ɽ i * +V +Mɮ <E {] x E ʱB Jc + i EbҶxɱ {] Jc + * x +{x {] E iɮ +b] ڴ EB E SV <ɨ Vc VB* 1997 Vɤ ֱɪɨ ʺƽ V E ɮEɮ l iɤ Snɮ V < ʤɱ E E +B l* iɤ x i E l* ɮ {] {] E l Ex {] E l-l x q = nx =`B l + {] +n ɽ iSi < l*

15.00 hrs.

+V ɮ {] Miɮ n nx i Sɱ * ɽں Ei E ɺi `E Ex <ɨ EU vɮ nʽi x Vɰ * <ʱB x {] ɱɽ EE EU +b] ڴ E + =n E ɮEɮ =x +b] E xM*

Mɮvɮ ɱ MǴ (Vɪ{֮) : +Mɮ xɽ xM i E EM?

V {ɪɱ] : +Mɮ xɽ xM i ɮ {ɺ ɺi *

... (ɴvx)

Mɮvɮ ɱ MǴ : = ɨɪ +{E n E M*

... (ɴvx)

V {ɪɱ] : ={vI V, iɰ{i ɮ {] E +vɴx + l + =ɨ ɽi ɮ i ɨx +< l* ɽi ɮ l <E Jɱɡ l + ɽi ɮ l l* < ɮ {] JֱE ɽ < + ɱ + l E ʱɥɱ<Vx ɽi Vɰ + {] x = n En =`ɪ* EO {] ɽi JֱE i i , nںɮ {]Ǫ E i *

Mɮvɮ ɱ MǴ : +SU V*

V {ɪɱ] : MǴ V, +{ Zɺ i Eɴ+* BE U] E nx ɱ J֮x V x n l, =xE E ɱ Mɪ* Eh ʺƽ V x E E n l* ɮnɮ {] {bi x V E ɨx ci i l Ex EO Vɨ i l*

ֱɪɨ ʺƽ n (Ʀɱ) : ɽ Vɨx Sɱ Mɪ*

V {ɪɱ] : Eh ʺƽ V x U] ɡV |vx j V E Jɱɡ E n i =x {n ] n* ɽ bF E Jɱɡ *

VҴ |i{ b (U{ɮ) ={vI V, ɽ ʴɹɪiɮ *

V {ɪɱ] : ɽn, <ʱB ʴɹɪiɮ E Vɤ < ʤɱ E E +ɪ l

... (ɴvx)

MR. DEPUTY-SPEAKER: Shri Rajesh Pilot, you are inviting trouble.

Jɮ < (ɱɺ) : ɮn {ɴɮ V x E Eڮ E l, ɮn {ɴɮ V E EO E Ucx {c*

... (ɴvx)

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={vI V, +V E ʤɱ E ɮ V x E E ɮ EU ʮVɴx * <ɨ x EU +b] ڴ E * Vɽ iE {]xɪʱ] E i i ɽ +SU i * +Mɮ ɮ E{]Ҷx i + V 24 |iɶi + 76 |iɶi E + =ɺ ɽں Ei E {]xɪʱ] * V Z +Ec ʨɱ + V < <ƶƺ |ʨɪɨ E V.b.{. E {ɮ]V ɽ ɮi E 1.3 , +ɮE E 5.2 , .E. E 6.5 + =l Eʮ E 8 *

There is an availability of potential.

=xx ɽ iɪ E +V E 22 23 |iɶi {{ֱx ʺɡ <ƶƺ {ʱɺV {ɮ *

EҤ BE J ]] {ɱɺV , {]ƶʱ] * n <ɨ +M Eɨ E VB, ɮ E{]x Eɨ E VB i +SU M* Vɺ xҪi ʤɱ ɪ V , Vɺ xҪi xi x< V , =ɨ E xɽ +B* +{x ɹh Ei E xi + xҪi E E < n E {U E * +Mɮ +SU xҪi E l xi xi , ɽ Vɤ M i ɽ xҪi i xi ɽ xiV ni Ex xi xi ɨɪ xҪi nںɮ i + Vɤ xi M i i xҪi ni i * <ʱB n {U V * < {]ƶʱ] E nJi B < ʤɱ V SV < M< , ɽ +SU { < M< *

ɮ ɽi l B.+<.. + V.+<.. E i E * ʤɱ ɡ E E =xE E< |<]<Vx xɽ * < ɮ E{]x ɪ V * <ɨ E< ֮< xɽ * +Mɮ <ƶƺ E{xɪ <ix E{]] i <x nJ E i E ? Vɤ Z b xɽ E < +Sɪ V +M xE VBM i ncx E ʱB iɮ M* Vɤ Z MM E <x {U M i ɽx x>M E +{x ] {ɽ V n, ɮx +M {ɽS Vi* +Mɮ ɮ E{]x ɱ i ɽ

... (ɴvx)

<E] ɤ E ʱB ɮɤɮ J * = { E{xɪ +BM* BE b ɽ M E ɽ BEn +E ]E +ɮ E M* Z =E EU =nɽh ʨɱ * S<x 10 ɱ |<]<Vx x E n +V 20 {ɮ] ɮ |<] E{xɪ {< * < iɮE i<x +* ɽ U] n * <ɺ E{ɮ xɽ Ex Sɽi Ex S<x Vɰ E{ɮ E Ei * <ɨ Sxi xɽ Ex SʽB E ɽ BEn ɦ E ]E +ɮ E M*

+V E ʽɤ Mֱx `E * <ɨ xE + ]{ɮ M xɽ + {BM* 100 Eb xɨɨ <E] J + 200 Eb E <ƶƺ E{xɪ E J * ɽ +SU En * <ɨ B Mɱi M xɽ + {BM Vx nںɮ { { Ex E <]] M* ɽ +SU En E { ɽ xɽ VBM* ... (ɴvx) ʤɱ ʱJ E <xx ɮ MbǺ ʱB MB * <ɨ V ɪn M, ɽ ɽ xɽ VBM* ɮEɮ {ɮ ʴɶɺ Ex {ci * +Sɪ V +{ ֮ i xx* 1997 +{ ɮEɮ E {] E l*

... (ɴvx)