Opposition claims that gov. is to hand over control and ownership to foreigners
Rajya Sabha on Wednesday approved the Insurance Amendment, 2021, which increases the maximum foreign investment allowed in an insurer from 49% to 74%, amid criticism from opposition parties over the clause allowing “control and ownership” by foreign investors.
Opposition parties tried, unsuccessfully, to paralyze the house by demanding that the bill not be rushed and instead sent to a permanent committee. They marched to the Chamber well after Finance Minister Nirmala Sitharaman proposed the bill. The Chamber has been suspended four times.
The debate started at 3:30 pm, when the Opposition reluctantly relented to debate rather than continue with the protests.
Senior Congressional leader Anand Sharma questioned the very justification and intent of such a bill. He asked when the government has a majority in both houses why it was in a hurry to pass the bill, avoiding the parliamentary scrutiny that the opposition was demanding. He said that insurers keep people’s money in custody and that this bill broke it. He also accused the government of violating the guarantee given in 2015 that “Indian ownership and control” would remain.
Mr. Sharma said: “We are not opposed to the divestment policy, but it is about divestment or a leap towards privatization and embarking on the large liquidation of national assets built assiduously over the years.”
He also signaled that large insurers are not short of capital and that the bill differs from the government’s motto – “Atmanirbhar Bharat”.
DMK MP Tiruchi Siva pointed out that none of the insurers achieved FDI even up to the current limit of 49% and questioned the justification for increasing the limit.
In response to the debate, the Minister of Finance, Nirmala Sitharaman, assured the Chamber that the insurance holder’s money will not come from the Indian coasts and will have to be invested here compulsorily. She argued that more FDI would mean more competition and, therefore, better negotiated prizes for the end user.
Contrary to the main criticisms of the opposition parties about the transfer of “control and ownership” to foreign companies, Sitharaman said that this came with safeguards. The key personnel in the administration would have to be Indian and, therefore, would be governed by indigenous laws.