Treasury benches back 100 per cent FDI in insurance, Opposition flags risks
The Lok Sabha witnessed a sharp debate over a Bill proposing 100 per cent FDI in the insurance sector, with Treasury benches backing higher investment to boost penetration and jobs, while the Opposition warned of risks to credibility, affordability and social inclusion
New Delhi: Members of the ruling dispensation on Tuesday supported a bill to raise FDI in the insurance sector to 100 per cent, with the Opposition countering the move in the Lok Sabha, saying the past governments chose protection over profit to help all sections of society.
Initiating the debate on the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, Manickam Tagore of the Congress said provisions of the bill were unsettling and could lead to people questioning the credibility of the insurance sector.
He said successive Congress governments at the Centre have given priority to “protection over profit”, which the present dispensation was doing away with. He said nationalisation helped all strata of society feel included.
Countering him, KV Reddy of the BJP, who was the first speaker from the treasury side, said privatisation has helped greater insurance penetration as competition has prompted companies to offer benefits to customers.
He maintained that FDI is not stopping local players in any way. He opined that now insurance agents can sell policies and schemes of multiple companies as they will not be bound down by working for one player.
At present, Reddy claimed India has 70-75 lakh insurance agents, and an enhanced FDI will create more jobs in the field. Noting that while healthcare is cheaper in India compared to other countries, it is still unaffordable, Reddy said that in such a scenario, increased insurance penetration is a must.
Utkarsh Verma of the Samajwadi Party claimed that the draft law was a surrender before corporate interests. He claimed that in the coming times, foreign players will get full control of the insurance sector, which would harm the interests of people living on the margins.
He was of the view that enhanced FDI will eventually lead to spiralling premium rates, depriving the middle class and the poor. The bill proposes to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.
