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DR. NITISH SENGUPTA (CONTAI): Mr. Deputy-Speaker Sir, I rise in support of this Bill. The question of reforming the insurance sector has been agitating the nation since the Era Sezhian Committee in 1983, which was by and large accepted but somehow or other because of the pressure brought on by the trade unions, the then Government developed cold feet and did not pursue this matter.

Since 1991, this matter has been coming up again and again, appearing and disappearing like King Charles' head. Today, I feel the basic issue is to get away from a certain mindset which has been bedeviling us for the last so many decades about everything should be in the nationalised sector.

Sir, I do not disagree that insurance business has increased since then, since nationalisation in 1956 and 1973, but it could have increased much more. There, I fundamentally maintain that Government management and service industry do not go together. Wherever it is a question of Government management running a service industry, it cannot run economically, it cannot run efficiently. Although, figures were quoted to show how much the LIC or GIC's business has increased, I maintain that it could have been much more, many times more, had it been allowed under the private sector as also with the Government... (Interruptions) I have individually asked many of the insurance employees... (Interruptions)

SHRI BASU DEB ACHARIA : What has happened in other countries?

MR. DEPUTY-SPEAKER: This is his maiden speech. Please do not interrupt.

DR. NITISH SENGUPTA : Shri Rupchand Pal gave a brilliant speech with a lot of facts and figures. It was more like a lawyer who is given a brief and he is asked to collect all evidence.

MR. DEPUTY-SPEAKER: Hon. Members, as there is no Panel Member available in the House, I would request, with the consent of the House, Shri Basudeb Acharia to preside over the House.

1654 hours (Shri Basudeb Acharia in the Chair)

DR. NITISH SENGUPTA : Mr. Chairman Sir, my friend, Shri Rupchand Pal gave a very eloquent speech, giving lot of facts and figures. But as it was found out that there was a lot of inconsistencies and contradictions in the figures given, as was pointed out by many Members. It was very much like a lawyer who is given a brief and asked to collect all possible evidence in his favour, but they may not be necessarily true to life.

Sir, we are at the end of the 20th century and are moving into the new millennium. The basic question now is not what the LIC and the GIC have done but what more they could have done; and can we get away from allowing other players to come and operate in this particular field of insurance business.

Sir, there are two aspects in this Bill. One is that of permitting the private sector initiative to come into this area and second one is that of permitting foreign investment in a limited way. Unfortunately, the second aspect seems to be the kind of dominating spectre, which is affecting everybody and not much was said about permitting the private sector initiative. It was mentioned that the United States, Japan, etc. do not permit foreign investment. What they do not understand is the fact that foreign investment comes in the form of a Japanese company or American company. The entire picture is different. Even in the United States, there is a great deal of foreign investment. I know of an Irish company which acquired a US company only two, three years ago. There were many such cases.

First of all, I will take the arguments against them and then I will come to the arguments for them. The basic objections to this measure are three or four. The first one is ideological; the second one is undue fear of foreign investment; the third one is the question of security of employment; and the fourth one is the question of service to the public. Now, I will start with the job security. I appeal to my distinguished colleague, the hon. Finance Minister, that when this matter is discussed, the trade unions should also be taken into confidence and the matter should be discussed with them. Certainly we would like an assurance to go to them that nobody's job will be at stake and there will be a complete job security for some time. In the case of Sri Lanka ... (Interruptions)

SHRI LAKSHMAN SETH (TAMLUK): Up to what time? ... (Interruptions)

DR. NITISH SENGUPTA : Until they retire. ... (Interruptions)

SHRI SUDIP BANDYOPADHYAY (CALCUTTA NORTH WEST): Mr. Chairman, Sir, how can they dominate the House every time? When the whole House is silently hearing him, why do they interrupt him? ... (Interruptions)

MR. CHAIRMAN : Shri Lakshman Seth, please take your seat. Please do not interrupt.

... (Interruptions)

DR. NITISH SENGUPTA : Let me tell that after they have destroyed West Bengal ... (Interruptions) Having destroyed West Bengal, having turned West Bengal, which was an advanced State, a forward State in the 1970s into one of the most backward States in the country, now they are trying to dominate everything and turn the entire nation ... (Interruptions)

SHRI SOMNATH CHATTERJEE (BOLPUR): Sir, he has made a signal contribution. This is the loyalty that he has ... (Interruptions)

DR. NITISH SENGUPTA: No, it is not the question of loyalty. ... (Interruptions)

SHRI SOMNATH CHATTERJEE : We all know everything. Please do not force me to say things which you would not like to hear. ... (Interruptions)

DR. NITISH SENGUPTA : Please tell anything that you want to say. ... (Interruptions)

SHRI SOMNATH CHATTERJEE : It has become a fashion. ... (Interruptions)

MR. CHAIRMAN : Dr. Sengupta, please confine to the subject.

DR. NITISH SENGUPTA : Mr. Chairman, Sir, as I said, I appeal to the hon. Finance Minister that he should take the Unions into confidence and talk to them. I have personally spoken to a number of people. Believe me or not, you talk to an average insurance employee separately, not in the presence of leaders, and ask him whether he would like denationalisation or privatisation. I think, in 99 per cent cases, you will get the reply, `Please help us to go into privatisation. We are tired of this sort of stagnant atmosphere in which we are working everyday.' ... (Interruptions)

SHRI MANI SHANKAR AIYAR (MAYILADUTURAI): Dr. Sengupta, may I ask you a question? ... (Interruptions)

SHRI C.P. RADHAKRISHNAN (COIMBATORE): Sir, this is his maiden speech. Why are they interrupting him all the time? ... (Interruptions)

MR. CHAIRMAN : He is not yielding.

... (Interruptions)

SHRI RAJIV PRATAP RUDY (CHHAPRA): Sir, Shri Mani Shankar Aiyar is a senior Member and he is talking in such a way ... (Interruptions)

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SHRI RAJIV PRATAP RUDY (CHHAPRA): Sir, he cannot go on for long. Firstly he cast aspertions on the Finance Minister. Now he is interrupting him. ... (Interruptions) Sir, how can you run the House if a Senior Member is talking like this? ... (Interruptions)

17.00 hrs.

Every time he is using sentences affronting individuals. (Interruptions). He cannot say like that. (Interruptions).

MR. CHAIRMAN: Please take your seat. Shri Rudy, please take your seat.

... (Interruptions)


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MR. CHAIRMAN: I will go through the records.

... (Interruptions)

SHRI RAJIV PRATAP RUDY : Sir, this is not fair. This is not the way to talk. (Interruptions).

SHRI PRAKASH PARANJPE (THANE): Shri Mani Shankar Aiyar is disturbing every time. He is advising Shri Mulayam Singh Yadav also. (Interruptions).

SHRI KHARABELA SWAIN (BALASORE): Sir, this is not the only case. Every time he is getting up. (Interruptions).

MR. CHAIRMAN: Shri Swain, please take your seat. I have not allowed you.

... (Interruptions)

MR. CHAIRMAN: Nothing will go on record except Shri Sengupta's speech.


MR. CHAIRMAN: Please take your seat. Shri Swain, I am on my legs.

... (Interruptions)

MR. CHAIRMAN: Shri Swain, you please take your seat.

SHRI KHARABELA SWAIN : He cannot behave in this fashion. (Interruptions).

MR. CHAIRMAN: Shri Swain, please take your seat.

Nothing will go on record.


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... (Interruptions)


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Shri Sengupta, you please continue.

... (Interruptions)

DR. NITISH SENGUPTA : Sir, as I emphatically stated, let there be no fear of job loss or insecurity in the minds of our friends in the insurance sector. Now, the total number of...(Interruptions).

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DR. NITISH SENGUPTA : The number of employees of the GIC is about 79,000 or 80,000 and the LIC employees number about 1,20,000 or 1,29,000; altogether there are about two lakh employees in the insurance sector. I submit that for protecting the interests of these two lakh employees, are we not preventing the possibility of creation of new jobs, many times more than that? Unless insurance sector is opened up, this will remain stagnant.

Now, there has been very little innovativeness in the last few decades, since they were nationalised. In the last few years, of course, with the possibility of competition, the insurance authorities have somewhat opened up, but earlier it was a total lack of innovativeness which characterised them.

Sir, till today, we do not have any proper insurance scheme in place.

Had there been proper insurance in Orissa, the people would not have been suffering so much.

Health insurance is a sector which I should not even say has been neglected; it is just totally absent. There is no insurance. Even now I make bold to say that Hindustan Lever's presence is more felt in rural India than the presence of LIC or GIC because they have not been able to do that.

1706 hours (Mr. Speaker in the Chair)

The second thing is ideological objection and there my appeal to my friends - well, they are no longer to the Left but are now in the Centre - is that please try to come out of the ideological shell or the cocoon. Try to be at least like China or Vietnam. The world did not come to a halt with the Communist Manifesto of the 1848 or the Das Kapital of the 1864. The world has changed a lot. Specially with the new information technology, today the world has changed so much that we cannot shut ourselves from the rest of the world. Whether we denationalise insurance or not, with the information technology, with the Internet, I can tell you that there will be ways found where foreigners will enter this area, just as in the case of insuring our planes or satellites, we are always running to foreign insurance companies. So, many people will do their insurance abroad. By shutting ourselves off, it will not be possible to change the movement of the world.

In China, they have permitted insurance. It is true that it is twenty per cent, but China has other means of control which we do not have. China has other means of dividend repatriation. About the fear of foreign direct investment, how little is the foreign direct investment in the total quantum of India's investment? Somebody said, it is not even one per cent of India's GDP, it is not even one or two per cent of the total aggregate corporate equity of our country. So, why are we so unduly worried about foreign investment? When my friends from West Bengal go all out in the world to seek foreign investment, why are they objecting to permitting 26 per cent of foreign investment in a company in the insurance sector where it can bring a lot of new technology, a lot of new services?

According to an estimate, the opening up of the insurance sector will bring in six billion dollars of foreign investment. According to some of the estimates, it will create, I should say, not just these two lakhs of jobs as we have got now, but many times more. It will create a lot of new business, a lot of new innovatives.

Now we come to the arguments for insurance sector. I told you about the possibility of much greater inflow of foreign direct investment, and once again I say that it is much better to seek foreign direct investment than to seek the foreign loans - loans from the IMF, from the World Bank or from any other country. Foreign direct investment is much more dignified, much more respectable. It is more economical, it is more productive than taking loans from the World Bank or the IMF or any other country. Yesterday or day before, while the Orissa debate was on, my esteemed colleague Shrimati Geeta Mukherjee, whom I hold in very high respect, mentioned that it should be declared a national calamity because then we will get international assistance, we will get the help of the Red Cross. May I ask, where does the money for these international agencies come from? Where does the Red Cross get its money from? Once again from companies. So, why do we not get them directly to invest? If some companies have 26 per cent of foreign capital, I do not think heaven is going to fall. With 74 per cent, our people can have greater control. On the other hand, there will be new technology. And when foreign direct investment comes, how does repayment take place? Repayment takes the form of a certain percentage of the profit earned, after the company has started earning profit, which can usually happen six, seven or eight years afterwards. Till that time that inflow of funds remains as a part of our foreign exchange reserves. By the time we start repaying them in the form of dividend, employment has been created, taxes have been paid, production has started and a lot of new things have already happened. Therefore, I would say that foreign direct investment is much more economical, much more productive and much more respectable and dignified than taking money from international agencies like the World Bank and the IMF...(Interruptions)

DR. BOLLA BULLI RAMAIAH (ELURU): Some countries have refused external aid. Japan has refused it.

DR. NITISH SENGUPTA : That is why Japan is in such a soup and Japan's economy is in such a soup. ...(Interruptions) Japan only wants to export and does not want to import or wants to take anything from outside. ...(Interruptions) That is why Japan's economy is in such a soup.

The next thing is the question of innovativeness and service. Having been an L.I.C. policyholder for many many years, I always found that paying them their premium is as though it was a punishment and they were doing a favour to me, to the policyholder by accepting my payment. They will never remind me, whereas in the days of private sector they would always send premium notices which were coming. L.I.C. would never think it necessary to give you a proper notice. I hope things have improved now. But at least in my time I remember that it was always that they accept the premium as if they are doing you a favour by accepting your premium.

Take the case of claims in regard to car accidents. How many times has it not happened? There is an accident and you have to go through a net of corruption between the inspectors of G.I.C. and so many others. Unless you pay money, your claims will never be settled. Well, someone questioned about the claim settlement record. That is all right to say that no claims will be given and it is settled. But then, is it really settled? How many people suffer whose houses have been burnt? They cannot go through a sort of web of bureaucratic delay and corruption and all that. Therefore, I would say that for the sake of greater service and better claim settlement ...(Interruptions)

SHRI SUNIL KHAN (DURGAPUR): You were also in the same line. ...(Interruptions)

DR. NITISH SENGUPTA : Sir, everytime they hold a threat of strike. They go on strike. ...(Interruptions)

SHRI TARIT BARAN TOPDAR (BARRACKPORE): He has been a bureaucrat for years. He had served the L.I.C. ...(Interruptions)

DR. NITISH SENGUPTA : I have dealt with L.I.C., G.I.C. and everybody in my official career. But the point is that all the time they are holding the threat of strike. Let L.I.C. or G.I.C. go on strike. The Government should try to solve this problem as late Shri Charan Singh did solve the problem of Patwari strike in U.P. which was successful. You should always remember that in trying to protect the interests of these two lakh people are we not sacrificing the interests of many millions of people who are jobless and who are in the unorganised sector? In Bengal, there is a saying. The English translation of the saying is that you are putting oil in a oily head. I am afraid our trade union friends are all the time doing that. They are all the time trying to protect the interests of the organised sector which is not more than about 30 million in our country and forgetting the interests of 400 to 500 million workers in the unorganised sector who cannot put all barriers here and who cannot go on Dharna. ...(Interruptions)