As reported by BusinessLine, the Union Cabinet approved amendment in the General Insurance Business (Nationalization) Act, 1972 in a meeting held on July 28, paving the way for privatization of one government-run general insurance company. The Centre might focus on Sections 10A and 10B of the Act.
Subsequently, a bill will be moved to the Parliament. While the bill is not a part of the legislation’s indicative schedule for the monsoon session, there is no transparency on whether it will be introduced during the remaining days of the session which is set to conclude on 13th August.
The amendment comes after Finance Minister Nirmala Sitharaman’s budget announcement where she stated, “We propose to take up the privatization of two Public Sector Banks and one General Insurance Company in the year 2021-22. This would require legislative amendments in this Session itself.” Nevertheless, the bill was not introduced in the Budget Session.
Presently, there are four government-run general insurance companies, namely National Insurance Company Ltd., New India Assurance Company Ltd., Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. One of these companies will be privatized.
According to the Economic Times (ET), NITI Aayog, which was appointed to suggest a suitable candidate has chosen Cabinet Secretary-led United India Insurance to the Core Group of Secretaries on Disinvestment.
