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Insurance bill puts govt in a bind as SJM, BMS, Sena harden stance

Amberish K Diwanji in New Delhi

Finance Minister Yashwant Sinha has declared that the Union Cabinet will look into the insurance bill before it is introduced in the Lok Sabha. He gave the assurance to a delegation comprising representatives from the Swadeshi Jagran Manch and the Bharatiya Mazdoor Sangh, who have declared their opposition to the insurance bill.

His statement might affect the Bharatiya Janata Party-led government's plan to introduce the bill to reform the insurance sector in the current session of Parliament, which Sinha had promised to do at the World Economic Forum session on November 30.

The SJM and the BMS, along with representatives of the various insurance trade unions, held a rally today at Jantar Mantar, not very far from Parliament House, to protest against the government's decision to open up the insurance sector to foreign investment. However, the rally was a damp squib with only about 30 people present, peaking for a brief while at around 70.

However, the speakers clearly declared their intent to oppose the bill tooth and nail. "This rally was put together quickly, but we have plans to call a nation-wide strike which will evoke a far greater response," said Anand Vij, an RSS worker and employee with Oriental Insurance.

The SJM promotes the concept of swadeshi (economic nationalism) and is strongly opposed to globalisation and liberalisation of the Indian economy that was set in motion seven years ago by then Congress party's finance minister Dr Manmohan Singh.

What must certainly embarrass the BJP government is that the BJP, the SJM and the BMS all claim lineage from the Rashtriya Swayamsevak Sangh, which too is reportedly against the BJP's plan on insurance. BMS leader Dattopant Thengde is a respected RSS worker, like Prime Minister A B Vajpayee and Home Minister Lal Kishenchand Advani. So is S Gurumurthy, a leading light in the SJM.

After the meeting with the finance minister, SJM convener Murlidhar Rao declared that they were waiting to see the government's response before deciding their next step. He warned that the SJM and its allies would launch agitations throughout the country if the BJP did not heed their request.

Mohan Guruswamy, advisor to the finance minister, said Sinha was keen to hear the views of the SJM-BMS. But he refused to say whether the bill's introduction would be deferred. Sinha also said that since Parliament was in session, it would be a breach of privilege to mention whether the bill was going to be introduced.

The bill is expected to be introduced in the Lok Sabha on Monday or Tuesday. Sinha has given a notice to Speaker Ganti Mohana Chandra Balayogi to this effect.

S Gurumurthy said that allowing foreign participation in the insurance sector, even in a minority stake, was against the national interest. He insisted that the economic collapse of the Southeast and East Asian nations was because they had allowed foreign participation in key sectors of the economy. "Under no circumstance must we allow repatriation of funds from India, and foreign participation means just that," he stated.

To make matters worse for the BJP, which is already reeling from the impact of its debacle in the state assembly election in Delhi, Madhya Pradesh and Rajasthan, 75 BJP members of Parliament have declared that they are against the insurance bill.

While addressing the rally, Thengde stated that SJM and BMS workers would go to the constituencies of all those MPs who support the bill and canvass against them during the next election. This move will hurt BJP MPs because it was they who had, while in the Opposition last year, succeeded stalling then finance minister P Chidambaram's effort to introduce the insurance reform bill. Thus to turn around when on the Treasury benches and back the very same bill is proving difficult, to both the party and the individual MPs.

Gurumurthy categorically insisted that the SJM has no truck with the BJP, even though both claim allegiance to the RSS. "We are not a part of the government," he stated, "we just supported them the last time because they were favourable to the concept of swadeshi. Now that they have gone back on their promises, we are going to oppose them."

He, however, admitted that aside from the public posturing, hectic parleys are on through the offices of the RSS and through sympathetic MPs to get the government to reverse its decision.

Murlidhar Rao also declared that the SJM was not bothered whether its opposition to the insurance bill would harm the BJP's continuation in office. "It is not the SJM's concern how long this government lasts. We are opposed to the insurance bill and on that, there will be no compromise regardless of which party is in power," he said, reflecting the hardening of the SJM's stance.

Gurumurthy claimed the government and the bureaucrats who advised the ministers had not studied the implications of the bill. "There is no need for India to introduce the insurance reform bill this year. Even as per the World Trade Organisation rules, financial sector reforms are to be discussed in 2000, so why are we keen to go ahead now?" he asked. He said even the United States and the European countries had not completely opened up the financial sectors.

However, there is a clear divide within the SJM-BMS alliance on the insurance sector reforms. The SJM is only against the participation of foreigners in the insurance sector, even in partnership with Indian firms, but is not against opening up the insurance sector per se to Indian companies or privatisation as such.

The BMS and the insurance trade unions, on the other hand, are dead against any form of privatisation, even to Indian companies. They insist that the present monopoly and oligopoly must be maintained. "Privatisation will be a stepping stone to the presence of foreign companies," said Sukhanand Singh, vice-president of the BMS, "and once foreign companies come in, even with minority stake, they will soon put pressure on the government to be allowed a majority stake."

Also, insurance sector workers have strongly opposed any privatisation attempt, fearing for their jobs. "Unlike other sectors, the insurance sector is a profit-making one, so why should the government think about privatising it?" asked Singh.

Gurumurthy tried to gloss over the differences. "Right now we are united on the need to oppose foreign participation. We have our differences, but that does not mean we don't unite for specific purposes," he said.

He added that the SJM-BMS's next step would be declared in a couple of days, depending on the response of the government.

The Shiv Sena, an ally of the BJP-led coalition government, today said that it would oppose the bill, if introduced in Parliament.

Leader of the party in the Lok Sabha Madhukar Sarpotdar said the government had not consulted the Sena on the bill. ''This is an important bill and the government had to discuss it with all its allies. Without consultations, how can they (the government) expect us to support the bill?'' he asked.

The bill fell outside the purview of the national agenda for governance, he said.

Additional reportage: UNI

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