ORGANISED by the Kerala State General Insurance Employees Union (KSGIEU), which is affiliated to the All India Insurance Employees Association (AIIEA), a seminar sought to highlight the plight of public sector undertakings in Ernakulam district of the state. The seminar on ‘Relevance of Public Sector Undertakings,’ organised at Kochi as part of the General Insurance Nationalisation Day observances on May 13, 2014, highlighted the threat the profit making public sector general insurance companies are facing from the government’s reckless privatisation and liberalisation policies. Leading trade union activist and commentator V K Prasad, who spoke on the seminar’s topic, said because of the popular resistance the corporate sector, with the concurrence of the central government, has devised new methods to “take over the control of public sector undertaking with strategic business agreements.” Citing the agreement between the Reliance Capital and the State Bank of India (SBI), he said the “the new business model” has given undue advantage to the corporate giant to extract all benefits from the customer base of the SBI “without actually assuming the responsibility and obligation of a banking entity.” In future, when the Reliance Capital acquires a banking license, nearly 80 percent of SBI customers would be poached by the former to its fold, he warned. Prasad also highlighted the sad plight of public sector undertakings in Kochi, like FACT, HOCL, HMT and Cochin Port Trust, which were on the verge of closure, because of the policies of the central government. A day long hartal was held recently in Ernakulam district to highlight the crisis faced by these undertakings and the government’s step-motherly attitudes. The closure of these undertakings would have serious social consequences as several thousands of workers in these organisations stand to lose their livelihood, he said. He said there was an international conspiracy to destroy the fertiliser companies like FACT, and convert India into a market for international fertiliser companies. He said Cochin Port Trust had become financially unviable only because of the government policy. He said an environment was being created for the takeover of the port by some private entities operating in Kochi. Prasad further said entities like the Insurance Marketing Firms (IMF), proposed in the insurance sector, were intended to destabilise the present architecture of the public sector insurance companies. In this context, he said, trade unions have a very significant role --- to foresee the dubious moves of the government and the corporate houses and to come up with appropriate counter strategies so as to confront the dangers to the very existence of the public sector general insurance companies. V R Ramachandran, regional manager of the United India Insurance Company in Kochi, who had inaugurated the seminar, said a majority of those working in the public sector general insurance companies had no experience of the “private sector culture.” He said it was the strength of the public sector financial institutions that helped the country to overcome the grave financial crisis in 2008. Private sector organisations were headed by the very people who had left the public sector after getting a lot of experience here, he said. In the early phase of privatisation, many big clients too had left the public sector general insurance companies, he said. But the poor claim settlement methods of private companies convinced these clients about the reliability of the public sector insurance companies and they returned back, he said. Ramachandran said because of the poor solvency margin of the private companies, they were not able to get quotes in the reinsurance market. He further said the unhealthy business practices of private companies and pro-private sector policies of the government posed serious threats to the public sector general insurance companies. Because of the adverse policy environment, trade unions have the added responsibility to defend and protect the public sector general insurance companies, he said. In his welcome address, C B Venugopal, general secretary of the KSGIEU, observed that it was due to rampant corruption and fraud committed by private companies that forced the government in 1971 to nationalise the private general insurance companies. He said in 1972 the government passed the General Insurance Business Nationalisation Act and the General Insurance Corporation (GIC) and four subsidiaries were created. It was because of the nationalisation that the industry witnessed a phenomenal growth and general insurance services were made available to ordinary people in all parts of the country, he added. He said public sector general insurance companies contributed to the national growth by investing huge sums in social sectors of the economy. He said opening up of the insurance sector has resulted in diverting the small saving of the people, mobilised by the public sector insurance industry and hitherto used for development of the nation, to private monopolies for private investments and profit. Venugopal said with the advent of the neo-liberal reforms, public sector general insurance companies had been under constant attack. He said with the government policies favouring private capital, the insurance sector was opened up in 1999, as the IRDA Bill was passed by the parliament. He said the government had been trying to privatise the sector, but the valiant struggle launched by the AIIEA had thwarted the moves over the last two decades. He said the Insurance Laws (Amendment) Bill, pending in the parliament, provided for the disinvestment of the public sector companies and proposed to increase the FDI to 49 percent. He said the bill could not be passed as AIIEA leaders met more than 440 members of parliament and submitted to them a memorandum, explaining the ills of privatisation. Venugopal said the biggest challenge before the insurance employees was to fight against the bill and save the industry. He said the 23rd national conference of the AIIEA, held at Nagpur in January this year, has decided to continue the campaign to protect the public sector industry without any letup. Another important challenge was the merger of the four insurance companies to create a sing monolithic corporation like the LIC, so that the public sector became strong. He said in spite of several representations, the government had given a cold shoulder to the demand. M U Thomas, president of the KSGIEU, presided over the function. In his presiding address, he said with the passage of the IRDA Bill the central government was overtly and covertly trying to weaken the public sector. He said despite the poor staff strength and adverse policy environment, the public sector general insurance companies, competing with nearly two dozen private companies, had retained 55 percent market share and attained a 10.20 percent growth. He said the productivity of the employees in the public sector had gone up tremendously. Further, he said, the wage revision fell due on August 1, 2012 but the response of the GIPS managements had been indifferent. He said the union had to adopt new strategies in the light of the recent developments and confront the enormous threat. E P Mani, district secretary of the KSGIEU, proposed the vote of thanks.