Lok Sabha on Monday passed a bill to amend the general insurance law to allow the government to pare its stake in state-owned insurers. The amendment in the General Insurance Business (Nationalisation) Act, 1972 is to facilitate privatisation of one general insurance company in the public sector which has met a lot opposition from PSU employees as well as other political parties.
The Finance Minister in the Budget 2021-22 had announced a big-ticket privatisation agenda which included two public sector banks and one general insurance company.
As of date, there are four general insurance companies in the public sector - National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited. Unconfirmed reports suggested that the NITI Aayog had recommended United India Insurance Company as one of the potential candidates for privatisation.
Even with bill passed it is unlikely that the sale will be wrapped up in this fiscal year as per experts as given the challenges in identifying suitable buyers and making sure that no downsizing at the public sector outfit takes place, the process is likely to be lengthy.