CPI(M) appeals to PM not to raise Insurance sector FDI

Chennai, Nov 17 (UNI) The Communist Party of India (Marxist) today appealed to Prime Minister Manmohan Singh to drop the Centre's move to raise the FDI in the Insurance sector from 26 per cent to 49 per cent and raise the capital of the LIC from Rs five crore to Rs 100 crore.

In a letter to the Prime Minister, CPI(M) Rajya Sabha member T K Rengarajan said the global financial crisis has cast its shadow on almost all the countries and the Insurance sector was no exception.

He wanted the Centre to reconsider its cabinet decision in this regard.

He said several companies, including the AIG, which had come to India in the Insurance sector were facing a crisis and being bailed out by their respective governments.

''In this context, any attempt to raise the FDI in the Insurance sector will neither protect the hard earned savings of the people nor the country's economy'', he claimed.

On the move to amend the LIC Act 1956 to raise its capital, Mr Rengarajan said there was no need for it when the LIC with Rs five crore capital could raise itself to new heights building an asset base of Rs 8,04,000 crore to Rs 1,17,000 crore more than its liabilities and having raised a solvency Reserve of over Rs 25,000 crore.

''The proposed hike in the capital by Rs 95 crore does not seem to be based on any economic need and welfare of the Institution'', he said and added the apprehension of LIC employees that there was a hidden agenda to privatise the LIC could not be dismissed.

Mr Rengarajan also objected to the Centre's move to amend the IRDA Act, GIBDA and Insurance Act 1938 to further liberalise the Insurance sector.

UNI GV VV SY AS1417