THE Centre of Indian Trade Unions, in a statement issued on January 19 has denounced the desperate moves of the Narendra Modi government for disinvesting 25 percent shares in all the five public sector general insurance companies and opening them to private hands including foreign companies. For this, the government has decided to list these companies in the stock exchanges.
The plea taken by the government, as revealed by finance minister’s statement to media, is that disinvestment of the government owned insurance companies is being made to enable the companies to raise capital from the market besides improving their “transparency and accountability”. The objectives declared by the finance minister reveal either the government’s ignorance or its philistine motive to push these well functioning insurance companies into gradual privatisation. Obviously the latter, that of phased privatisation is the reality, given the obsession of the government to promote strategic sale of most of the profit making public sector companies through the Niti Aayog which has dedicated itself to announce every other day its recommendations to sell one or the other functional PSU, with the advance sanction from the PMO.
All the five public sector general insurance companies are functioning well, consistently earning profits and regularly making handsome contributions to national exchequer through tax and dividend payments. Except once at the time of nationalisation, these public sector insurance companies consistently recapitalised themselves during the last four and half decades through internal resource generation, without any budgetary support from the government and they have been continuing on that trajectory. Their business profile is much more broad-based as far as coverage of people is concerned compared to the private sector insurance companies, who mostly run with foreign collaboration, and which are only running after lucrative high profit segments with many of them indulging in unethical and unfair practices. Even the IRDA had to go on record about unethical and unfair ponzi oriented practices of a number of private insurance companies. And through their participation in public sector insurance companies’ stake-holding through disinvestment, the government of the day wants to improve transparency and accountability? Can insanity or dubiousness, whichever one may guess, go further ?
So far as accountability is concerned, these public sector general insurance companies bear the overwhelmingly major burden of all the insurance based welfare schemes announced by the prime minister till now unlike the private sector insurance companies. So far as their services to customers are concerned, their claim settlement rate is much higher and better than the private insurance companies. The rejection of claims by the PSU insurance companies are much less than that of the private insurance companies which ranges between 30 to 40 percent. Yet, the finance minister could speak about improving transparency and accountability while pleading on diluting their shareholding in favour of the private insurance companies, the integrity of most of whom is questionable!
CITU considers the move of the governemnt for disinvestment of public sector general insurance companies to be not at all for improving transparency, accountability or capital base but for weakening these PSU companies to the advantage of private sector insurance players and for finally pushing them towards privatisation. Such move cannot be in the interests of the national economy.
CITU calls upon the trade union movement and working people in general to unitedly oppose and resist such retrograde moves of disinvestment in public sector general insurance companies by the government of India and extends full solidarity to the protest action being organised by the insurance employees movement against such a disastrous move.