Insurance unions deplore Budget proposal on FDI, privatisation

Employees' unions have slammed the NDA government for its decision to increase FDI in the insurance sector from 49 per cent to 74 per cent and choosing the IPO route for Life Insurance Corporation of India. Incidentally, Bharatiya Mazdoor Sangh, which is close to Sangh Parivar, has also strongly criticised the decision on increasing FDI cap in insurance sector. While the Left-affiliated unions have slammed the government for its budget proposals, BMS general secretary Binoy Kumar Sinha said they would finalise their action plan after a detailed discussion at the national executive council meeting convened in Chennai from February 12 to 14.

"We will launch an agitation if the government sticks to its proposals," BMS all India vice-president M Jagadeeswara Rao told Bizz Buzz. He also opposed the move to impose tax on interest earned on annual contributions of over Rs 2.5 lakh on Employees' Provident Fund.

When contacted, Insurance Corporation Employees' Union (ICEU) Visakhapatnam unit general secretary N Ramanachalam said an increase in FDI ceiling would allow MNC insurance companies like AIG who have a bad record in claim settlement to capture Indian market.

Referring to FM Nirmala Sitharaman's announcement to amend Insurance Act, 1938, he said floating IPO for LIC would finally lead to dismantling of the world's largest life insurance company with an assets worth Rs 36 lakh crore, all India market share of 74 per cent in terms of premium and 76 per cent of policies. He said LIC was continuing to have a lion's share leaving just 24 per cent of the market to 23 private players.

Stating that the government wanted to make LIC sick like BSNL, he said entry of multinational insurance companies like AIG would lead to introduction of unethical practices in the market taking the insured people for a ride with several hidden conditions. He also criticised the proposal to privatise one among four public sector general insurance companies. LIC, he said, had a claim settlement record of 99 per cent.

CITU State president Ch Narsinga Rao said their fears over the BJP-led NDA government's agenda to privatise LIC and general insurance companies had come true with the budget speech made by the FM.