The union cabinet’s nod to increase Foreign Direct Investment (FDI) in the insurance sector from existing 26 per cent to 49 per cent is being welcomed by the employees of the private life insurance companies, but those working in the public sector insurance monolith life Insurance Corporation (lIC) of India are opposing it.
The NDA Government in its first general budget had proposed to increase the FDI in the Insurance sector. On Thursday the cabinet decided to go ahead with the plan. There are 23 private life insurance companies in India and there is an air of jubilation among the staff over the government’s decision. The government’s decision to increase the FDI in Insurance sector is a long pending issue and experts believe that the decision could bring revenue of around Rs 25000 crore in the industry.
The Regional Manager of Bajaj Allianz life Insurance Company, Puneet Trivedi said that since the government took the route of Foreign Investment Promotion Board’s (FIPB) the control of the insurance companies would firmly be hands of the Indian partner and Indian government. He was of the view that Insurance companies would now have access to the much needed foreign funds which would result in more investment in increasing the network of the offices in the country.
The Divisional Secretary of National Federation of Indian field Workers of India, J D S Bisht said that decision is unfortunate as the private companies and their foreign partners only aim to earn profit and care little about the social responsibilities. He said that the government is in the direction of allowing 100 percent FDI as it is gradually increasing the limit. Bisht claimed that the private companies are working only in the urban areas and targeting affluent people.