Dr Daleep Pandita
Recently people gave mandate to the manifesto of a political party on many burning issues that a common man is currently faced with. But certainly not on a less important issue like increasing Foreign Direct Investment (FDI ) in insurance sector and that too so immediate after the assumption of their power. Enhancing FDI in Indian insurance industry at this stage has less relevance for masses and little implications for a common citizen.
When the sanctum sanctorum of Indian insurance industry was thrown open to private and foreign partners with 26 % capping on FDI, it was very well taken that this decision shall improve the services of insurance sector in our country. Enhancing low penetration of insurance particularly at rural level, besides providing quality services both in terms of cost effectiveness and hassle free claim settlements simply remained a distant dream, which is quite true even as on date also. We have not been able to create much needed awareness of real benefits of life and general insurance portfolio in India. The operators by and large, concentrated on their commercial viability aspects, for which apparently they seem to be right also, since insurance industry in India is treated as profit generating industry.
Existing system of insurance in our country has made private and foreign partners less accountable to their operations and result oriented performance in rural and social areas, where there seems to be manipulations of data and figures for the satisfaction of regulator. The fact remains that most of the rural India has little knowledge of such private insurance operators and their functioning. Their presence is concentrated in urban and commercially active pockets of India ignoring our rural population. These operators have also not devised need based low cost suitable products and services to offer for the rural poor. Government sector Public Sector Undertakings are facing with their own internal and market survival problems. These companies are also not provided with adequate infrastructure, particularly human resources to expand their presence in order to cater to the needs of large population.
Under such circumstances ignoring the ground level facts, how increase in FDI in this sector from present 26% to proposed 49 %, is going to address real issues being faced by Indian insurance industry, remains a million dollar question. Not learning real lessons from the past experience, instead focusing on improving quality and making insurance an affordable commodity, raising FDI in insurance segment is simply to please politically influential community and succumbing to the selfish foreign business houses.
In fact, potentially huge and virgin insurance market of India is viewed as a lush green pasture by foreign operators to make their buck fast, of course at the cost of irony and agony of a common Indian. Going to be a strong fast moving vibrant economy, the untapped Indian life and general insurance market offering long term profitable gains, is being viewed as a potential source for making profits by private and foreign trade partners. In fact, life and general insurance portfolio contribute substantially to the country’s economy and infrastructure, so any compromise on its operations mean great loss to our national economy.
The basic need of the hour is to be watchful of our economic interests and develop our own strong mechanism to improve our domestic insurance operations, that has direct bearing on a common man. The growth of this industry offers equal employment opportunities for our youth, which foreign partners do not appreciate and provide such opportunities. Improving Third party claim settlement mechanism both in terms of quick judicial procedures and time bound satisfaction of awards is immediately needed for the justified relief of accidental victims and claimants, in which foreign players are totally disinterested . Diversification of insurance activities particularly to Agriculture and crop based insurance segments not only address our agriculture dependant economy but also cover most of our rural population, which is presently the most needed redressal issues.
Indian Trade Unions and public at large associated with Indian insurance industry, be its employees or intermediatory, are organising strong protests against such moves of present government. Even such resentment is going to pick up more upon political interferences. The common man is least bothered about such constitutional amendments enhancing FDI in insurance from 26 % to 49% when they have failed even to understand and reap the benefits of existing 26 % FDI capping.
Indian people expect competitive and quality services in insurance sector and its percolation down to masses at affordable cost besides hassle free quick claim settlement. Be it through increase in FDI or making existing operators more accountable, results at ground level must speak it of its own. This move of the present Government can be taken as a fake encounter and as an appeasement policy of the Government towards capitalistic business houses, ignoring the basic purpose of insurance services for Indian masses.
( The author is a senior officer with general insurance PSU at Jammu )
Follow our WhatsApp channel