Thursday, July 31, 2014

சோனியா காந்திக்கு ஒரு கடிதம். இப்போதாவது புத்தி வருமா?


காங்கிரஸ் கட்சி மக்களவைத் தேர்தலில் அடைந்த படுதோல்விக்கு முக்கியமான காரணம் அதன் மோசமான உலகமயப் பொருளாதாரக் கொள்கைகள்தான்.

மோடியும் அதே நாசகரப் பாதையில்தான் சென்று கொண்டிருக்கிறார். எங்கள் வழியில்தான் பாஜகவும் செல்கிறது என்று சிவகங்கைச் சீமான் உள்ளிட்ட காங்கிரசிற்கு பாடை கட்டிய பெரிய மனிதர்கள் பீற்றிக் கொண்டிருக்கிறார்கள்.

இன்சூரன்ஸ் துறையில் அன்னிய மூலதன வரம்பை உயர்த்துவது அபாயகரமானது, அதற்கு ஆதரவாக காங்கிரஸ் தலைவர்கள் பேசுவது அபத்தமானது என்று சுட்டிக்காட்டி எங்கள் அகில இந்திய இன்சூரன்ஸ் ஊழியர் சங்கத்தின் தலைவர் தோழர் அமானுல்லாகான் காங்கிரஸ் கட்சியின் தலைவர் திருமதி சோனியா காந்திக்கு ஒரு நீண்ட கடிதம் அளித்துள்ளார்.

அதைப் படித்து அதிலுள்ள விபரங்களை புரிந்து கொண்டு தனது திசையை மாற்றினால் காங்கிரஸ் கட்சிக்கு நல்லது. இல்லையென்றால் அக்கட்சி சவக்குழிக்குள் அடக்கமாவதை யாராலும் தடுக்க முடியாது.

தோழர் அமானுல்லாகான் அனுப்பிய கடிதத்தின் நகலை கீழே அளித்துள்ளேன். நேரம் இல்லாமையால் தமிழில் மொழி பெயர்க்க முடியவில்லை. மன்னிக்கவும்.

Smt. Sonia Gandhi,                                                                       July 28, 2014                                                                                    
Indian National Congress,
10, Janpath, New Delhi-110011

Dear Madam,


The All India Insurance Employees’ Association is the biggest and oldest trade union of insurance employees.  We have been playing a very constructive role in the growth of the public sector insurance industry with a clear understanding of its role in the national economy.  We have been agitating against the FDI hike in the insurance sector from 26 percent to 49 percent.  Our opposition is not based on any partisan reasons but on the grounds of its impact on the national economy. We firmly believe that financial sector is the key to national development and liberalization of this sector is fraught with dangerous consequences. The global financial meltdown and the consequent economic crisis vindicate our understanding. Therefore, we are disturbed by the statements of the important functionaries of the Indian National Congress in support of the decision of the NDA government to hike the FDI and steps towards privatization of the public sector general insurance companies.  We, therefore, wish to place our views on the subject and request you to reconsider the support to Insurance Laws (Amendment) Bill.

The global insurance scenario is not very happy. Since the financial crisis in 2008, the advanced industrialized nations are experiencing stagnation in premium income. The annual growth rate in North American is (-) 2.9%, Oceania (-) 3.7% and Western Europe (-) 0.6%. (Sigma Report 3/2014). Moreover the demography has made insurance a difficult business to operate in these markets. Therefore, it is natural for the multinational companies to demand further opening up of the insurance sector in India which is very promising with a young population. But we need to carefully analyse the consequences of higher FDI limit and the benefits or otherwise to our national economy. Today there is a consensus world over that domestic savings play a large role in capital formation and economic development and therefore it is not prudent to allow the foreign capital greater access and control over the domestic savings by increasing the FDI limit.

The two major arguments in favour of increase in the foreign equity limits are:

(1) The private insurance companies are starved of funds and it has become inevitable to increase the FDI limit; and

(2) The increase in the FDI limits will help deepening the insurance market and increase the levels of penetration.  The resources so generated will help funding of long term infrastructure projects.

We are not in a position to agree with both these arguments on the basis of the existing realities. The reasons for our disagreement are:

a)    Insurance Sector unlike manufacturing is not capital intensive. In many countries the start-up capital for an insurance company is much lower than in India. The high solvency margin and other regulations are so framed as to make it look that an insurance company cannot do business without FDI. (FDI in insurance – R.Ramakrishna – Actuary).

b)   There are around 50 joint venture companies operating in the country both in life and non-life segments. The Indian promoters of these companies are big industrial and financial houses. They have enough resources including easy access to funds for deployment in case of need.  They also have the option of raising resources through initial public offerings.

It is not possible to accept that they lack resources for investment in their insurance ventures.

c)   There is no relationship between the capital employed and the business procured. The following table justifies our argument. The data is as on 31st March 2013.

Name of the Company
Total Capital & Reserve (in Crore)
Total Premium Income earned (in Crore)
Bajaj Alliance
Bharathi AXA
HDFC Standard

d)   The above table clearly points out that higher capital does not mean higher mobilization of premium income. What bring increase in premium income is a better trained agency force and other efficient channels of distribution.

e)   Insurance penetration and density depend upon the growth of the national economy and the disposable income in the hands of the people. Despite poor incomes and very little disposable incomes, India has done extremely well in insurance. The World Economic Forum gave Indian Life Insurance industry the top global ranking and it ranked India number 3 in general insurance business in terms of density. India’s global ranking is 11 in volumes of life insurance premium in 2013. (Sigma Report.)

f)     The criticism on insurance penetration is unnecessary, though there is a great possibility for improvement. Life insurance penetration in India at 3.1% compares favourably with 3.2% of United States, 2.9% of Canada and 3.1% in Germany. India has a higher level of penetration than all the Latin American countries and many of the developed nations. We can improve upon this if the incomes levels and disposable incomes increase.

g)   The argument that entry of private sector has deepened insurance market needs close scrutiny. We may point out that LIC recorded compound annual growth rate of 19.5% in the nineties. We strongly believe LIC would have continued to grow at this rate had the sector not been opened. With a 19.5% CAGR the total premium of LIC would have been Rs.337256 crore for 2013-14. Interestingly the combined TPI of LIC and the private companies is the same figure for 2013-14. This again makes it clear that the entry of private companies did not result into expansion of the market. Rather the private companies tried to capture a share of the market created by the public sector. It is also a fact that the private companies concentrated on the big ticket policies with no social obligation for the poor and disadvantaged.

We are, therefore, convinced that opening up the sector did not benefit the economy nor did it benefit the insuring public. The claims that opening up of insurance sector would open the floodgates for the foreign capital to benefit infrastructure remain unsubstantiated. The insuring public with high lapsation ratio and high rate of claim repudiation by the private companies has suffered. In the face of these realities, it is imprudent to give the foreign capital a greater space and control over the domestic savings.  We have real apprehension that FDI hike will only succeed in hastening the process of mergers and acquisitions which would have serious impact on the public sector and consequently the national economy itself. The claim that even when the foreign equity limit is raised to 49%, the management and control will remain with the Indians is unconvincing. You are aware that with 26% equity participation the foreigners are now controlling the functioning of many of the joint venture companies.

We, therefore, request you to review your support to the FDI hike. We will be very happy to answer any clarification required on our assessment. We will also be happy to meet you personally to explain our stand if it so required.

Thanking you,
Yours faithfully,
Sd/- (Amanulla Khan)
President, A.I.I.E.A


  1. come on. this much lengthy letter sonia cannot read (english). pl translate in italy and send to her.


  2. good effort, appreciable.