NITI Aayog recommends privatising UIIC

NITI Aayog has recommended privatisation of state-owned insurer United India Insurance coverage (UIIC).

Key Points

  • This recommendation was made in the backdrop of government’s goals to maneuver forward with new public sector enterprise (PSE) coverage for a Atmanirbhar Bharat.
  • NITI Aayog prompt that general public sector insurer should be thought of privatisation within banking, insurance coverage and monetary provider’s sector.
  • These sectors have been categorized as ‘strategic’ within PSE coverage.
  • Coverage proposes for minimal presence of government-owned corporations in strategic sectors and privatisation.

Concerns

  • Decision to privatise United India Insurance company is being criticized by All India Insurance Employees’ Association (AIIEA).
  • This is because Government had earlier decided for merger of three public sector general insurance companies. It has given up these plans and now is pushing for privatisation.
  • AIIEA is demanding government to revive its plan for merger which would bring economies of scale and benefit national economy & weaker sections of population.

Background

Union Finance Minister Nirmala Sitharaman had announced in Budget speech of 2021 about central government’s plan of privatizing two PSBs in fiscal year 2021-2021 along with one general insurance company.

United India Insurance Company Limited (UIIC)

UIIC was incorporated as Company on February 18, 1938. In India, General Insurance Business was nationalized in 1972. Under the nationalisation process, UIIC subsumed 12 Indian Insurance Companies, 4 Cooperative Insurance Societies, Indian operations of 5 Foreign Insurers and General Insurance operations of southern region of Life Insurance Corporation of India.

Function of UIIC

It provides insurance coverage ranging from bullock carts to satellites. Company is a pioneer in taking Insurance to rural masses with large level implementation of Universal Health Insurance Programme by central government and schemes like Vijaya Raji Janani Kalyan Yojana Tsunami Jan Bima Yojana & National Livestock Insurance etc.

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