Amid criticisms from the opposition, Rajya Sabha passed the Insurance (Amendment) Bill on Thursday that increases the foreign direct investment in the insurance company from 49 per cent to 74 per cent. Union Finance Minister Nirmala Sitharaman moved the bill in a haste instead of sending them to a Financial Standing Committee or a joint select committee comprising members of both houses. Nirmala Sitharaman claimed that bill allows foreign ownership and control of insurance companies with safeguards and security.
The opposition parties dissented against the passing of the bill, and the house was adjourned four times. The debate started at 3:30 pm. The opposition later walked out by showing protest against the centre's decision of refusing to send the bill to a parliamentary panel.
Senior Congress leader Anand Sharma questioned the intent of the bill and asked for justification. "We are not opposed to the policy of disinvestment, but is it disinvestment or leapfrogging towards privatisation and embarking on grand clearance sale of national assets built assiduously over the years," he said.
Nirmala Sitharaman replied to the debate by assuring the house that no money of any policyholder will leave Indian shores and have to compulsorily invest here. She also added that more FDI results in better competition and thus better-negotiated premiums for the end-user.
Many of the members had raised concerns regarding greater control of foreign firms would also mean that the policy of reservation will be weakened. Ms Sitharaman answered that the public sector insurance firms employ only over seven lakh people, on the other hand, the private sectors employ more than 23 lakh employees and agents.
The minister refused to give a proper reply on the urgency to bring this bill. Many members from the opposition drew attention to the fact that most of the companies haven't met the existing threshold of 49%. "Members have asked, isn't there enough money in this country? There are also enough borrowers. So enough is not enough," she replied.
Nirmala Sitharaman introduced The Insurance (Amendment) Bill, on March 15, 2021, in Rajya Sabha. The Bill amends the Insurance Act, 1938.