New Delhi – The Lok Sabha cleared its first barrier on Monday, passing a Bill through changing the country’s general insurance legislation and allowing the government to sell its interest in state-run insurance firms without debate, as Parliament remained in chaos.
The General Insurance Business (Nationalisation) Amendment Bill, 2021, aims to allow the government to reduce its interest in well-known state-owned general insurance firms like the LIC, therefore assisting in its divestment goals. Divestment refers to the government selling a portion of its stake in state-owned businesses.
The General Insurance Business (Nationalisation) Act, 1972, is the bill’s parent act. Opposition members disrupted the Lok Sabha, and the session was delayed till Tuesday.
Read more : SBI launches SIM Binding feature on its online banking platform
“We propose to take up the privatisation of two public sector banks and one general insurance business in the year 2021-22,” finance minister Nirmala Sitharaman said when presenting the budget for 2021-22 in February. This would necessitate legislative changes, which I plan to initiate during this session (Budget).” The administration, on the other hand, did not introduce the bill during the February Budget Session.
According to data from the finance ministry, insurance penetration in the country is 3.7 percent of GDP, compared to a global average of 6.31 percent. According to the Bill, the proposed law intends to eliminate the need that the union government should possess not less than “51 percent of the equity capital in a selected insurer.
Read more : Vedanta Aluminium becomes India’s largest green power purchaser
It also outlines the Bill’s goals, including “more private engagement in public sector insurance firms.” The government aims to meet its projected divestiture target of 1.75 lakh crore for 2021-22, but the epidemic has hampered progress.
The first step toward the Bill’s completion was the approval of disinvestment and share reduction of the country’s largest insurer, LIC, by a commission led by the finance minister. The government has also approved the insurer’s listing on stock exchanges and initial public offers (IPOs), which refer to the sale of a company’s stock to investors.
