ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Calcutta Diary

Many of the assumptions of those favouring privatisation of insurance belong to the realm of pure fiction. But since the authorities in New Delhi have already entered into commitments, philosophy will render its quiet verdict: what has to be done will be done. The nation has to go through the experience of a return to the pre-1955 conditions as far as the insurance industry is concerned, just as it has to cope with some of the other slings and arrows of fortune following the onset of globalisation. Consider the brand of black humour the country's banking industry is exemplifying.

Details that are inconvenient are pushed aside. About half a dozen years ago when the government decided to privatise insurance on the insistence of the International Monetary Fund and the World Bank, it went about the task according to strict grammar. The hoary custom had been set up during the Raj; the government constituted a committee to look into the problems afflicting the insurance industry and recommend measures toward their solution. The committee was expected to put in a command performance and pump for wholesale denationalisation of the insurance industry, thereby making it easy for the authorities to proceed in the manner foreign financial institutions had wanted it to proceed. The denouement was somewhat anti-climactic. The committee produced a modest-sized report stretching to one hundred and fifty pages, of which only one and a half pages concentrated on the issue of insurance denationalisation. The rest of the report went to great lengths to extol the performance of the LIC and the GIC in the post-independent decades. And a number of chapters dealt with their future programme of work. But since the purpose of setting up the committee was clear-cut, the chairman, one presumes, persuaded his colleagues to add a brief, somewhat disjointed chapter recommending the entry of private entities in the insurance sector.

In the course of the attempt to pass the insurance bill in the previous parliament, which failed, and the renewed attempt in the current parliament, which succeeded, there was not one reference from the treasury benches to the committee's report. The authorities must have been embarrassed no end that the committee was so inept while drafting its recommendations; its obfuscation of the issue was, to say the least, most disappointing. Nor that it really mattered much. For meanwhile the message had gone down the line: it is the old liberal house, whatever the foreigners want to denationalise, please adhere to their firman; even more generally, whatever instructions the foreigners transmit, blindly conform to them without asking any question; you will be rapped hard on the knuckles should you have the temerity not to do so.

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