The All India Insurance Employees’ Association, the biggest and oldest trade union of insurance employees’ in India has vehemently opposed the UPA government’s decision to hike FDI in insurance from 26 per cent to 49 per cent.

The Centre also approved an increase in FDI cap in FM radio, news and current affairs, print media, commodity exchange, stock exchange, petroleum and natural gas refining, defence production and private security agencies. “The association is firmly opposed to the hike and strongly condemns the Centre’s decision. The Centre’s decision is nothing but an attempt to serve the interests of both indigenous and foreign capital,” alleged P.A. Joseph, general secretary of the association’s Belgaum unit, in a press release on Thursday.

He said the government was making all-out efforts to pass the Insurance Laws (Amendment) Bill 2008 in the current monsoon Parliament session in order to hike FDI in insurance from 26 per cent to 49 per cent and facilitate the process of disinvestment of public sector general insurance companies, to which the AIIEA was firmly opposed. Interestingly, the hike comes in sharp contrast to the Parliamentary Standing Committee’s disapproval of the hike in foreign equity limits in insurance sector.

He said it was unfortunate that despite the experiences of the global economic crisis and the pitfalls of liberalising the financial sector, the government was opening up the insurance sector to foreign players, which would help foreign capital gain greater access and control over domestic savings.

This is not in the nation’s interests, Mr. Joseph observed. He said AIIEA had been mobilising public opinion against the Bill and decided to call upon insurance employees to observe a one-day nationwide strike if the government passed the Bill. The government should withdraw the decision to hike FDI in sensitive sectors like insurance, defence and telecoms.