LIC employees hold protest against FDI

Ludhiana, October 5, 2012: LIC Employees under the banner of Northeren Zone Insurance Employees’ Association (NZIEA), Ludhiana Division, staged protest demonstrations during lunch recess and strongly opposes the government’s decision to approve the Insurance Laws (Amendment) Bill and  the PFRDA Bill which will allow the foreign finance capital to gain more control over the savings of the Indian people.

Addressing the protestors, the association’s Divisional Secretary Amarjit Singh said the major amendments to the insurance laws were to increase the limit of FDI in insurance sector to 49% and to disinvest the public sector general insurance companies.

“These moves are against the interest of the national economy and against the interests of the people whose savings are involved in insurance and pensions. Increase in FDI would lead to the increased control of the foreign finance capital over the savings of the people of the country”, he said.

He said the Parliamentary Standing Committee on Finance said in its report placed before the Parliament on 13^th December 2011 that there was no need to increase the limit of FDI to 49% as “the government seems to have decided upon this issue without any sound and objective analysis of the insurance sector following liberalisation”. 

Cautioning the government of the global financial crisis, the Committee had recommended to the government that the private companies might explore avenues to tap the domestic capital instead of increasing the FDI limits, he revealed.

“When this is the unanimous recommendation of the Parliamentary Standing Committee, the cabinet decision to hike the FDI in insurance sector to 49% is clearly against all democratic norms and this is done only to appease the international finance capital”, he believed.

Further, he said the FDI which came into India in Insurance Sector during the ten year period of 2001-2011 was a mere Rs.6,813 crores as equity in 33 private insurance companies.

As against this, LIC alone provided for Rs.7,04,151 crores into social sector and infrastructure sector during the eleventh five year plan (2007-12).  This clearly proved that “for the growth of any  developing economy, people’s savings were a much better alternative than the foreign investments,” he said. 

Singh said the insurance penetration in India was led by the Public Sector LIC. The insurance penetration level in India was at 4.4% as against the insurance penetration of level of 3.5% in USA and the world average of 4%, he said, adding there was no truth in the argument that FDI increase would help insurance penetration.  Insurance penetration was always proportional to the disposable income levels of the people.

The Insurance Laws (Amendment) Bill also provided for disinvestment of the Public Sector General Insurance Companies.  AIIEA (All India Insurance Employees’ Association )opposes this move since it would weaken the PSU General Insurance Companies and their strength to take up the social responsibilities.  Instead the government should merge the four PSU general insurance companies and made them a single monolithic corporation to meet the goals set by the government, he said.

He revealed that insurance employees under the banner of AIIEA also decided to launch  a one day nation-wide strike if the government proceeded with enacting the Bill in the Parliament.