The General Insurance Business (Nationalisation) Amendment Bill, 2021 was passed by the Rajya Sabha on August 11 without discussion amid protests by the Opposition MPs. The Bill, which aims to provide greater private participation in the public sector insurance companies, was passed in the Lok Sabha on August 3.

The Opposition has accused the government of "bulldozing" the legislation and demanded that the Bill be referred to a select committee of the House.

In her Budget speech this year, Finance Minister Nirmala Sitharaman had said the government wanted to privatise two public sector banks and one general insurance company in 2021-22.

"This would require legislative amendments," she had said.

The General Insurance Business (Nationalisation) Amendment Bill, 2021 aims at making those "legislative amendments."

About the amendment

The Bill seeks to amend the General Insurance Business (Nationalisation) Act of 1972. Back in 1972, then prime minister Indira Gandhi had enacted the law to nationalise all private companies undertaking general insurance business in India.

Now, in a shift from this 'Left leaning' policy, the incumbent government seeks to bring in more private capital in the general insurance business and allow privatisation of state-run general insurance companies.

Key features

The amendment does away with the provision that mandated the Centre to have at least 51 percent of the equity capital of an insurer. Private players will now be allowed to appoint the majority of directors or have the power to influence management or policy decisions.

Why the opposition to the Bill?

From the TMC and the DMK to the Left parties, the Opposition has expressed its concern over the Bill. Opposition parties wanted it to be referred to a select committee but the motion was rejected by a voice vote. Subsequently, Opposition members stormed to the well of the House, tore papers, and moved close to the Rajya Sabha presiding officer’s chair.

The Left parties claim that the Bill has been brought with the intention of benefiting “crony capitalists.”

India has four state-run general insurance companies --National Insurance Co Ltd, New India Assurance Co Ltd, Oriental Insurance Co Ltd, and United India Insurance Co Ltd. So far, officials concerned have been tight-lipped on which public insurance would be privatised first.

(Edited by : Shoma Bhattacharjee)

First Published:Aug 12, 2021 6:05 PM IST