Indian insurance bill passed

Insurance workers are worried about the affect on their jobs

Parliament in India has approved a controversial bill to allow domestic and foreign private investment in the country's insurance sector.

The passage of the bill in the lower house (Lok Sabha) was assured by the BJP-led government's majority.

The legislation still has to go through the upper house (Rajya Sabha), but the main opposition Congress Party has indicated it will support the legislation if the government accepts certain amendments.

The government-sponsored Insurance Regulatory and Development Authority Bill is opposed by left-wing parties and by trades unions who fear it will lead to job losses.

During a sometimes heated debate, the government said that the two state-run insurance companies which dominate the market would not be in danger.

"Employees have nothing to fear . . . they will have their jobs. In fact, the opening up of the insurance market will create more jobs," said Finance Minister Yashwant Sinha.

After the bill was passed, opposition parties - except for Congress - staged a walkout.

Amendments

On Wednesday, Congress party spokesman Ajit Jogi told journalists that it would vote in favour of the bill if the government accepted certain amendments.

On Monday, Congress members of the upper house had walked out over the government's refusal to drop the name of former prime minister Rajiv Gandhi from a list of people under investigation for alleged corruption in the Bofors arms scandal.

However, party officials sought to play down suggestions that the two issues were linked.

Job fears

On Wednesday, some 200,000 insurance workers went on strike to protest against the proposed legislation.

Left-wing parties fear job losses

The bill proposes a 26% limit on foreign participation in an Indian company.

At the moment, the market is dominated by two state-owned companies.

The government says the bill will improve services by introducing competition.

India began opening up its economy in the early 1990s, but retained the insurance sector within the public sector.

Analysts say that although only a small proportion of Indians has life insurance, a growing middle class offers huge opportunities to investors in the sector.