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Government denies move to reduce stake in LIC and GIC

Finance Minister Yashwant Sinha on Tuesday ruled out the possibility of reducing the government holding in the Life Insurance Corporation and the General Insurance Corporation.

''We have no intention to dilute the holding in both the government insurance companies,'' Sinha told the media after the introduction of the Insurance Regulatory Authority bill, 1998 in the Lok Sabha.

Sinha said the government will ensure that both private and government companies have level playing field and the rules of the IRA will be framed accordingly.

Explaining the objects of the bill, Sinha said the bill has been brought in a transparent manner and clearly defines various objects and clauses unlike the previous government bill, which was silent on a number of issues including foreign equity.

However, several members of the ruling Bharatiya Janata Party Parliamentary Party have expressed apprehensions over the efficacy of the various provisions of the bill.

Some apprehended that the foreign investors might violate the provisions as was done by the Pepsi company, which had agreed to export its products but failed to do so.

Sinha said there was an ''informal agreement'' with Pepsi but this time specific laws were being incorporated in the IRA bill to ensure that the foreign companies did not take away the premium amount.

Sinha also made it clear that LIC and GIC will be out of the purview of the IRA bill.

The bill will also provide for investing the profits emerging out of the IRA into the social sector as was being done in the case of LIC and GIC.

Parliamentary Affairs Minister Madan Lal Khurana said the IRA bill will be referred to a joint select committee with specific provision that it should submit its report on the first day of the Budget session. The committee will also rectify any drawbacks that persist in the bill, he added.

UNI

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