Parliament okays IRDA Bill
Left parties stage a walkout
Tribune News Service

NEW DELHI, Dec 7 — Parliament today put its stamp of approval on the Insurance Regulatory and Development Authority Bill 1999, with the Rajya Sabha passing it.

Again, on expected lines MPs belonging to the Left parties (the CPI, the CPM, the Forward Bloc) walked out as the Rajya Sabha approved the Bill by 116-51 votes with one abstention. The Lok Sabha had adopted the IRDA Bill on Thursday.

The government again received the backing from the Congress in the Rajya Sabha, which was essential for the passage of the Bill as the coalition at the Centre does not have the required majority in the House. The Bill which had been debated yesterday and today for nearly six hours was vehemently opposed by the non-Congress opposition, specially the Left.

There were six motions by the non-Congress parties seeking the Bill to be referred to the House Select Committee after the Finance Minister Mr Yashwant Sinha, dismissed these attempts as an effort to delay the process.

When Deputy Chairperson Najma Heptullah, who was in the Chair during the proceedings, put the motion of Mr Ramashankar Kaushik to vote, it was defeated by a voice vote. The next motion of Mr Gurudas Dasgupta was defeated by a vote of 116-52, with the Congress and the Bahujan Samaj Party supporting the government after the opposition sought a division. Four other motions to this effect were rejected by voice vote.

In his reply to the debate, the Finance Minister asserted that the government and Parliament had retained enough controls, including the issuing of policy directives to the regulatory authority and its supersession in the Bill. He pointed out that the Government was for the opening up of the sector to competition and the apprehensions, as expressed by some of the members, that the country’s sovereignty had been surrendered were baseless.

The Bill, he said had been examined by two experts committee and by the Standing Committee on Finance of Parliament and their suggestions incorporated in the Bill. This process was initiated by the government when the Congress was in power. The United Front Government had also set up the statutory Insurance Regulatory Authority through a Bill in 1996.

He pointed out that the Government had infact expressed its intentions of bringing the Bill in its 1998 Budget and there had been no haste on its part.

The apprehension that the Bill was against the interests of the LIC and the GIC, which had enjoyed the monopoly in the insurance sector all these years was also incorrect. They had performed to the best of their ability but could still cover just 7 per cent of the population because of the vastness of the country. They would continue to compete with the new players and the Government would come out with a law on the competition policy.

Mr Sinha said the LIC and GIC were operating in 27 other countries and were mentally prepared to face the competition from foreign companies. “When our companies can compete in other countries, the foreign companies too should be allowed to operate in India.”

In his 45-minute reply, which was often interrupted by the Left party members, the Finance Minister recalled that the Opposition had cried foul when the banking and mutual funds sector was opened. He said however the experience had shown that the business had grown leaps and bounds. The banks in the nationalised sector were able to face the competition from the foreign banks. Similarly, the apprehension that insurance companies would lose out to their foreign counterparts was equally unfounded, he said.

Taking a dig at the Left, the Finance Minister said for them attracting foreign investments was a “pious” act and the same act by the BJP would be detrimental to the national interests. His threat to reveal the names of the MNCs investing in West Bengal drew loud protests from the Left.

Earlier, BJP member S.P.Gautam cautioned the Central Government not to lose sight of the “strong swadeshi thrust” in its national agenda while opening up the insurance sector to private and foreign companies. He said while he supported the Bill as it was in the interest of furthering economic reform, the government should not forget that it had, in the national agenda committed itself to examining the effects of globalisation.

He noted that the Bill was part of the United Front Government agenda and was not conceived by his party.

Mr V.P. Duraiswamy (DMK) said the entry of foreign companies into the insurance sector would encourage healthy competition which was essential for economic development. He urged the Finance Minister to clearly state who could invest in the insurance sector and urged him to safeguard and protect the wages of insurance employees.

Mr R.Margabandhu (AIADMK) opposed the Bill and wanted it sent to a Select Committee of Parliament as he said the insurance sector was an essential service fuelling the country’s economic development with funds at low rate of interest.

Mr Jayanta Roy (Forward Bloc) also opposed the Bill, saying the government could raise funds equivalent to $ 6 billion by encouraging the operations of the LIC and the GIC which already had made profits running into hundreds of thousands of crores.

Mr Balwant Singh Ramoowalia (Independent) opposed the Bill as he was sure foreign companies were not coming to do the Indian economy good but for taking its wealth out of the country. He said 80 per cent of the money invested in the insurance sector was going into productive channels and this would not happen if foreign companies were allowed entry.

Mr Mohan Das of the Congress while welcoming the IRDA Bill suggested to the government to ensure that the insurance companies took care of the 400 million people living below the poverty line in the country.

Mr Rama Shankar Kaushik of the Samajwadi Party questioned the government’s wisdom in deciding to import wheat when there was a buffer stock in the country. He charged the government of being under strong pressure from foreign companies.

Mr Kaushik said foreign countries had reached a saturation point in the service sector following which they wished to start their operations here. Demanding that the Bill be sent to the Select Committee of the House, he said it was strange that we have allowed 26 per cent investment against the practice at keeping the limit at merely 2 per cent to 5 per cent in the foreign countries.