Regarding the privatization of the public sector insurance company, the cabinet has approved the necessary changes in the GIBNA Act. According to government sources, now this bill will be introduced in the House in the ongoing monsoon session.
Cabinet approval for privatization.
Insurance Privatisation: The government is moving fast towards privatization of a public sector insurance company. The Union Cabinet has approved changes in the GIBNA Act (General Insurance Business Nationalization Act) necessary for this. According to the report of Times of India, the cabinet had taken a decision in this regard on Wednesday itself, but the government did not announce it.
According to government sources, now this bill will be introduced in the House in the ongoing monsoon session. It is believed that the government would like to get approval from the House for the proposal, under which the government stake in public sector insurance companies cannot be reduced to less than 51 percent. After the removal of this provision, the way for privatization of government companies will be cleared.
was announced in the budget
Finance Minister Nirmala Sitharaman had said in her budget speech on 1 February 2021 that two public sector banks and one government insurance company would be privatized in the current financial year. The target of privatization and disinvestment for the current financial year (2021-22) has been kept at Rs 1.75 lakh crore.
These companies top the list
It is believed that when the approval for privatization is received from the House, then the government will decide which insurance company to be privatized. According to sources, United India, Oriental and National Insurance will be selected for privatization. The source also said that this process will be delayed due to Corona and the possibility of privatization of the insurance company in the current financial year is very less.
Merger decision was postponed and capital infusion was done
Last year, the Modi cabinet had announced capital support for three state-run insurance companies in the country. National Insurance, Oriental Insurance and United India Insurance were given capital support in the cabinet meeting. Apart from this, it was also decided to increase the authorized share capital for these three insurance companies. The authorized share capital of National Insurance Company has been increased to 7500 crores. Apart from this, 5000-5000 crores of United India Insurance and Oriental Insurance have been made. In Budget 2020, the government had also announced the merger of the three insurance companies. The cabinet also changed this decision.
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