Sir, what about claim settlement? They are the best in the world. It is 98 per cent for the LIC and 74 per cent for the GIC. I would like to ask the Government as to what is the world average. It is only 40 per cent. Then, are we inefficient?

Sir, then I would like to come to the regulatory mechanism. It has been said that we are not privatising; we are not opening up and we are not going to disinvest. I have got a paper with me here which carries a statement by Shri Rahul Bajaj.

SHRI TARIT BARAN TOPDAR (BARRACKPORE): He is the Chief Advisor of the Government ... (Interruptions)

SHRI MANI SHANKAR AIYAR (MAYILADUTURAI): He is the one who has appointed him as the Finance Minister. It is not Shri Vajpayee who appointed him as the Finance Minister ... (Interruptions) He is an agent of the CII sitting here.

SHRI RUPCHAND PAL : He has said that financial reforms are needed. These include the banking sector, the Insurance and the capital market. It also covers privatisation of banks. He has also said that finally there should be privatisation by disinvestment in all areas including the banking and insurance sectors.

SHRIMATI RENUKA CHOWDHURY : You please look that side.

SHRI RUPCHAND PAL : I am appealing to their conscience.

SHRI MANI SHANKAR AIYAR : Please look there, those people are against you.

SHRI RUPCHAND PAL : What had the management of the LIC and the GIC had to say? I would not quote elaborately here.

MR. DEPUTY-SPEAKER: You please conclude now. You have already taken 25 minutes.

SHRI RUPCHAND PAL : Sir, I am making very valuable points.

SHRI TARIT BARAN TOPDAR : Sir, it is just the preamble to his speech.

SHRI RUPCHAND PAL : Sir, this is what has been said by the Managing Director of the LIC and I quote:

"Once the private sector is allowed to enter the field it would be difficult to keep out the undesirable entrepreneurs in view of the temptations to raise their resources through the LIC. Capital is bound to be very low as has been stated in the previous paragraphs".

Sir, why should the foreign companies be eager to exploit the Indian market. It is only will Rs. 26 crore. No high technology is involved but there is high profit and the national savings would be used for speculative purposes which is now being used for purposes of social development. The pre-1956 scenario is going to be repeated.

MR. DEPUTY-SPEAKER: Now, I am calling the next speaker. Shri B.B.Ramaiah.

SHRI RUPCHAND PAL : Sir, I am concluding within five minutes.

Now, I would like to quote what Shri C.D.Deshmukh replied once to Shri Feroz Gandhi. I hope, both the names are known to you.

SHRI SONTOSH MOHAN DEV (SILCHAR): Very much.

SHRI RUPCHAND PAL : It was about the private sector and how they were going to exploit the situation. We are going back to the pre-1956 situation.

C.D. Deshmukh told Feroze Gandhi:

"The number of ways in which fraud can be practised which was 42 in the days of Kautilya..."

Hon. Finance Minister once quoted Kautilya and that is why I am referring to Kautilya.

"...which was 42 in Kautilya's days has risen to astronomical figure these days."

If we go through this report we will find C.D. Deshmukh speaking about the importance of nationalisation. It is very important to remember. When nationalisation took place, there was Swatantra Party, the heritage of which is borne by some Members even now, and there was Jansangh, although less in numbers, which opposed nationalisation. Ultimately, within the Congress there was a division in 1969 which started to be called as a division between the `Syndicate' and the `Indicate'. BJP is carrying on with the same tradition, from Jansangh to BJP, with different tactics, with a different mukhauta and a different camouflage. Have the present Congressmen forsaken the old Congress leaders? Do they not respect their own leaders? Do they not agree with the reason and rationale based on which it was nationalised? They are casting away their own own ideology. They are leaving their own heritage. If they have to demarcate they should have the guts to say that Congress party oppose the privatisation of insurance sector. The Government is doing it out of compulsion, under pressure, out of expediency and out of opportunism.

Sir, in 1988, there was a discussion held in Mavalankar Hall on Super-301. Hon. Finance Minister, Shri Yashwant Sinha, said in that discussion that liberalisation was going to ruin our economy, that he would fight through his life against American imperialism for pressurising us with Super-301 to open up financial sector. Shri Atal Bihari Vajpayee, Shrimati Sushma Swaraj, Shri George Fernandes, Shri Ram Vilas Paswan, Shri Murasoli Maran and Shri Karunanidhi, everybody spoke similar things in the past. Shri Karunanidhi inaugurated a demonstration in Tamil Nadu in the presence of Shri Murasoli Maran. I can show the photograph of that demonstration. Hon. Speaker also put his signature when 116 Members of Parliament had written to the Prime Minister opposing the move to open up. Many friends from Congress had put their signatures, the BJP leaders who opposed this had put their signatures and submitted memoranda. Sir, I am not trying to score any debating points. I am just appealing to the conscience of all those who love this country and in whome a little bit of patriotism is left. This is going to cause havoc to our national economy with so much of financial strain. If you read, `Failed Promises', the report of the House of Representatives the scenario in USA will become clear. Do they allow outsiders to operate in their country? Yes, they do, but only to the extent of a meagre three per cent. We talk of reciprocity. Everybody knows that WTO could not take up insurance sector because it is a highly protected market. We Indians are opening up when there is no compulsion on us and we are being party to it knowingly or unknowingly.

Sir, the scenario will be very very difficult. After privatising LIC and GIC, the most profitable areas will be taken away from them. Urban areas will be taken away. Some say that we do not have attractive products? But the products of LIC and GIC are for common people.

16.00 hrs.

But the products of LIC and GICI are for the common man, for the working people and the fashionable products are for the upper middle class and large numberof such products as insurance for the cover for legs of the film actors and for the eyes of some artists may not be available with GICI and LICI(Interruptions) That is good. But more important is how the weaker sections and the poorer sections of our nation are being served by the LIC and GCIC.

I am mentioning about the regulatory body, the SEBI. What is our experience with regulatory bodies like TRAI and RBI? In a highly regulated market like the US, they have failed and stories of "failed promises" have come. Do you want to break the State monopoly of insurance? The world over, the scenario is cartelisation, oligopoly, monopoly, merger and acquisition. Do you want more penetration? With such GDP, as with 425 dollars of per capita income in India, how can you expect more penetration? Look at the report of Switzerland on Insurance. There the insurance business is only three per cent. Very few people believe in the Insurance Companies in Europe and US. Will those same foreign companies come and serve our social sector and strengthen our process of nation building? They believe in premium. The Chairman of the Insurance Regulatory Authority has come out openly that the Authority will not have any particular functioning with regard to tariff and fixation of premium. MR. DEPUTY-SPEAKER: There is a limit. Please conclude. Enough is enough.

SHRI RUPCHAND PAL : I am concluding. While opposing the Bill, I want to say that the Bill is not IRDA in the true sense. The Bill could better be named as Insurance Deregulatory and Destruction Authority Bill. I oppose the Bill wholeheartedly. With these words I conclude. Thank you.

DR. BOLLA BULLI RAMAIAH (ELURU): Hon. Deputy Speaker, Sir, this Bill on Insurance Regulatory and Development Authority, as Shri Rajesh Pilot has mentioned, was taken up during 1993. Reforms have started in 1991, of course, and then at that time, this was referred to Shri Malhotra, former Governor of Reserve Bank of India, to go into these details and give a report on that. The report was submitted in 1994 and later on on 20th December, 1996 during the United Front Government, this was brought to Parliament and it was also submitted to the Ministry of Finance and the Departmental Standing Committee to give its own comments. Subsequently, it was introduced in March, 1998 and again it was referred to the Standing Committee on Finance. Then the Standing Committee submitted its report.

Now this Bill has come for discussion in the House and it has gone to a number of sectors. People said that this would require some more time. It has not just come out without any proper investigation or opportunity for people to go through that. During the last six years, this Bill has come a number of times. It has been presented to Standing Committees and they have examined it and also submitted reports and finally the hon. Finance Minister has given all the consideration to it and it has come to the House. I am sure this has given enough time to make the drafting and to give whatever suggestions they want to make on this matter. Now this Bill has mainly come to the consideration of the House because insurance is one of the important factors for any economy. Today the amount of resources that we can develop in insurance is very important. We have also liberalised Indian Airlines and we have also seen lot of differences before the liberalisation and after that and lot of people opposed at the time of private airlines. Today they feel the difference in regard to the culture of the people, the attitude of the people and other developments and the same is the case with banking. We have given banking sector to outside country also and even foreign banks have expanded various banking operations. Here we want technology to come, as Shri Rajesh Pilot has put it.

Why have you gone in for having a private sector in various sectors like telecommunications? Why do you want to be in competition? That is the policy of the Government today because after going through many difficulties, the same Government which nationalized several sectors, have realized that in the interests of the people and in the interests of the country, we have to go in for reforms and liberalization. So, wherever possible, we must bring in the private sectors also and provide competition which is essential. In the area of telecommunications, there has been a very fast expansion.

The representation has come from the various associations of workers of the insurance companies. Their main anxiety is about job security. I can assure them that after liberalization, after the private companies come in and after the competition comes in, more jobs will be created. There will not be any problem. Today, we are employing two lakh people and it will be multiplied several times. More resources will also be generated.

Shri Pilot referred to social obligations. I am sure, that will be a part of the obligations of private insurance companies. In Andhra Pradesh, the hon. Chief Minister has ensured that even the huts are insured by the State Government. He wants to support the people belonging to the lower class. So, a girl child born in a poor family is given an insurance policy for Rs.5,000 so that by the time she attains the age of 15 or 16, she will be able to get Rs.25,000 for marriage or education. I am sure, this new policy of opening up the insurance sector will generate more and more new developments.

In the field of agriculture, there are various possibilities of expanding the insurance business. There are billions of cattle in this country. They also require to be insured. Today, we are talking of crop insurance. It requires to be expanded and they have to cater to a lot of people.

We require a tremendous amount of resources to be generated for the development of our infrastructure. We need more than $ 20 billion and we do not have enough money. The Government has brought in the private sector also. We need resources to come from outside. That is why in the Common Minimum Programme of the United Front it was proposed that an investment of $ 10 billion have to come from outside. The idea is to see that some resources are generated for development. Thus, the development that can take place in probably twenty years, will now take place in five years.

We are travelling by Boeing aircraft. Why do we not travel by jet planes? We want to give the facilities to the people. Everyone wants to take advantage of the developments that are happening in the rest of the world. We have a lot of technology. We have a lot of scientists. Look at what has happened in the field of software technology. We are producing the bulk of the world's software. Even George Bush Jr. has made a statement that in the next ten to fifteen years, 60 per cent of the world's software technology will come from India. That is where we have the opportunity. We must believe in the talent and abilities of the people of this country. We must open up and it is only in our interest.

Look at what has happened in the case of airlines, shipping and other large industries. A substantial quantity is going in for refinancing. We do not have enough resources. We are doing a lot of refinancing. That is why we want to strengthen the insurance sector. We must improve the insurance sector. We have to expand the insurance sector. Our resources must increase. We must have technology and competition to generate resources. This is exactly what we are looking for and this is why social obligation, as Shri Pilot said, is very important.

There are a lot of industries like hydel projects which require a long gestation period. This is where the resources generated by the insurance companies must be utilized.

The Government will always be able to regulate it. The legislation that we pass today is not final. Parliament has got the right to modify it, to correct it and to develop it. The hon. Minister of Finance has to monitor whether we are going in the right direction and whether the implementation is going on properly. We can monitor it constantly; we can change it constantly. We can always take the advice of the people. We must take advantage of what is good today. If we require some resources for development from outside, we have to get them.

What is being done in the Silicon Valley is basic, fundamental research. It is not done in Japan. But Japan would develop it much faster and start the commercial production also. So, we also should go in for applied research and make use of developments in other countries. We should always have international linkages. If we are talking today about globalization or liberalization, there is nothing wrong in it. We have also to utilize to our benefit the developments that take place in the world. A lot of countries are today waiting for the WTO.

They are all very anxious to come in. If it is not good, they will not come. I know that people are approaching us, saying that they will also be introduced into the WTO. That is why, we should be able to stabilise our position. When we first started, we had the Marrakesh Agreement. We have done something; we are continuously improving; and our position will become stronger and stronger tomorrow. There is no way we can fail in that. We can always take the interest of our country. This is the policy which we are going to follow.

There are some more items on which I feel we have done something. What did they tell here? What does the policy say? In 1956-57, 56 lakh of policy holders were there; now it has gone up to 850 lakhs. Income from premium has increased; the number of employees has increased; and the number of branches has increased. What we need today is the service to the policyholders. What percentage of people are doing it now? What percentage of people are covered in this? It is not even five per cent. We need to cover at least 30 per cent to 40 per cent people of this country. They should be given opportunities. That means, we require a lot of new technologies, new methods of approach, and new ways of doings all these things. The process of constant development is important. They should also have investment of funds which is important. These funds must be utilised for development, expansion of industries and infrastructure. ... (Interruptions) The Government has the right to do it. They can always put a lot on, what is called, social obligations; in the case of banks we are telling that we want to have so much money at a lower interest rate; for export, so much; for small scale industries, so much, etc. That is how we can also do it. We have always done it; we are always monitoring; and we can always dictate it with them. No sector or no company can do it without the assistance of the Government. ... (Interruptions)

MR. DEPUTY-SPEAKER: Shri Ramaiah, please address the Chair.

DR. BOLLA .BULLI. RAMAIAH : Thank you, Sir. That is why, we have this policy of liberalisation. We also have to see various figures that have been provided here. Income from premium has increased to Rs.19250 crore; the number of employees has increased to 1,25,000; the number of active agents has increased to 5,58,000. How many agents are working today? We see a lot of agents who just come in the last two months before close and for the rest of the time, they do some other business. I know quite a number of people like them. I have also explained to these people.That the need exactly is a good challenge. The young generation, the dynamic generation, dynamic and active people have to come into the picture. They should be able to work full-time satisfactorily in order to make insurance sector economical. The economics of this depend upon how we reduce the cost of these things and how efficiently we can make use of them. Inefficient people are not good to help us. It is the efficiency and the capacity of the people who will be able to produce the best results, which is very important. We have a lot of our own resources and our own talent, but we need additional resources and talent at the appropriate time so that we can expand our activities. We are producing our own satellites and we are producing our own rockets. We are also producing so many things in this country. They are all not because we are lacking. If you take the pharmaceutical sector, people say that we are lacking here. But we do not have enough resources to put into the basic research, but with the applied research we are doing it. Today we are the largest producers of bulk drugs and we may be taking them from other people who have done it. We have that capacity.


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