Says the four public sector companies would not be able to cover the 125 crore population in the country

Union Finance Minister P. Chidambaram has defended throwing open of the insurance sector to private players saying the existing four public sector insurance companies could not serve the growing Indian population.

Inaugurating the agent training centre of Universal Sompo General Insurance Co.Ltd and its new branch at Karaikudi, near here on Saturday, Mr Chidambaram said the Congress-led UPA government had decided to invite foreign direct investment in the insurance sector as the four public sector companies would not be able to cover the 125 crore population in the country.

He said the Japan-based Sompo Insurance Co. Ltd was one of the largest property insurance company in the world and it had tied up with Indian Overseas Bank (IOB), Allahabad Bank and Karnataka Bank to float the Universal Sompo General Insurance Company, the first public private joint venture in the Insurance sector.

Lamenting that rural people were unaware of the very concept of general insurance, Mr. Chidambaram said if the people were unaware of general insurance and its various products, the fault lay with the officials.

Speaking on the occasion, Mr O. N. Singh, Executive Chairman, Universal Sompo GIC said the company, after overcoming initial teething problem, was now growing at 35 per cent per annum.

He said almost 50 per cent of its business came from rural and semi urban areas.

On freebies

Union Finance Minister P. Chidambaram has said subsidies and freebies could not be a permanent feature if India was to become a prosperous country and a superpower.

Inaugurating 17 new branches, three training centres of Repco Institutions and launching Repco Bank's new deposit scheme, “Repco Crown” here on Saturday, he said subsidies and freebies could be seen as an initial support to make people economically stronger, but they could not be a permanent feature, if India wanted to become a superpower.

“The country could not develop, if people have to depend on subsidies and freebies. India could emerge as a super power and become prosperous and a wealthy nation, only if people are made to stand on their own feet,” he said.

Stating that it was the duty of the government to provide decent employment opportunities to the educated youth or help them to start their own ventures with bank loans, Mr Chidambaram, assuring bank assistance, exhorted the youth to start self employment.

He said the Congress led UPA had a clear vision to help the youths with bank loans and provide financial inclusion service to the people. It would go ahead with its vision and achieve the goal, unmindful of criticism, he said in an obvious reference to the criticism for the direct cash transfer scheme.

Pointing out that he had been accused of making people fall into debt traps, he said that the people on the other hand, look forward to the banks for loans for education, building houses, for buying cattle and start new ventures.

“No new venture could be started without a bank loan now,” Union Finance Minister said.

R. Varadarajan, Managing Director, Repco Group of Companies, said the bank's total business stood at Rs.7061 crore and it had earned a net profit of Rs 77 crore in the year 2011-12.