Opening up insurance

Print edition : November 16, 2012


INDIA is being invaded by multinational corporations of powerful capitalist countries. These profit-seeking foreign players remind us of the plundering of the country by the East India Company a few centuries ago. Very few Indians have retirement benefits such as pensions. If this nest egg is left to the mercy of private insurers, it will spell doom for the nation as a whole (Cover Story, November 2).

THE cover legend Inviting invasion aptly captures the governments moves on foreign direct investment (FDI) in the insurance and pension sectors. Frontline provides a comprehensive picture of the insurance scenario. While R. Ramakumars essay exposes the state of affairs in the health insurance sector in the United States, the interview with Amanulla Khan, president, All India Insurance Employees Association (AIIEA), demolishes the myths advanced in favour of increasing FDI in the insurance industry in India.

IN 1994, Frank Wisner, the U.S. Ambassador to India, remarked, The insurance sector is the flagship of American business. You let it in, and the rest of the fleet will follow in full strength. Such is the lure of the insurance sector. The issues covered by Frontline are a must-read for those actively resisting financial sector reforms.

DESPITE the fact that the Indian population is heavily underinsured, most insurers chase people who are already adequately covered, leading to overinsurance of a few. With a number of private insurers in the marketplace, one expects higher coverage of the population, but that unfortunately is not the case. FDI in the sector may bring more professionalism into the sector, but it is doubtful whether it will bridge the gap between the insured and the uninsured.

LIFE insurance and non-life insurance industries should be considered separately. The life insurance segment does not need any FDI to expand its business and earn profits. In fact, the LIC, the giant organisation that leads the business, is able to penetrate into rural areas and has a large capital base. FDI in this segment can be counterproductive. At the same time, as our industries grow, there is a need for increased coverage in the general insurance fields such as fire and other damages that may run up to huge sums. Allowing FDI in this segment will be a reasonable move.


Eric Hobsbawm

THE two tributes to Eric Hobsbawm highlight the immense stature of the legendary historian (Age of Hobsbawm and In Marxist tradition, November 2).

Benjamin Zachariah draws our attention to Hobsbawms tenacious objectivity, his exposition of Marxist values and his unwavering loyalty to them. Vijay Prashads piece deals with Hobsbawms account of the evolution of Marxism to meet the emerging political demands.


Hugo Chavez

HUGO CHAVEZS election as Venezuelas President for the fourth consecutive term points to the renewal of the regions progressive politico-economic environment and the possibility of building a strong socialist society there (Chavismo works, November 2). His victory proves once again the immense faith the people of his country have in him. The low point of his earlier tenure, as pointed out by the opposition and its supporters, was the increase in crime rate and cases of corruption at the higher levels of government. This presents a challenge to Chavez. The result should force the U.S. to rethink its policies towards the socialist states in the Latin American and the Caribbean region.


Malala Yousufzai

WITH their attack on a schoolgirl who dared to express her views against the extremist movement in a free and frank manner, the Taliban extremists have once again proved that they are the worst enemies of humanity (Taliban targets young activist in World View, November 2). The young Malala Yousufzais courage in speaking out against the Taliban is laudable. Civil societys outrage at the incident in Pakistan is a good sign. But the governments ambivalent approach to the issue is disappointing. On the one hand, incidents such as these are condemned, but on the other, the Taliban is still allowed to carry on with its activities.

IT was an attack on civilisation itself. It should be an eye-opener to all political parties, religious extremists and the Army in Pakistan.


Spy case

ONE has to be happy that Nambi Narayanan, a former Indian Space Research Organisation scientist falsely accused in a spying case, got justice during his lifetime (A battle half won in The Nation, November 2). Why have the other victims of the spy scam failed to take their cases forward? Have they lost faith in the legal system?


Police recruitment

THIS is with reference to the article Police complaint (November 2). The Union Public Service Commission, a central agency empowered to conduct civil services examinations, should welcome the suggestions put forth by the government of India to consider holding a separate examination to fill the vacancies in the Indian Police Service (IPS).

It is a well-known fact that the civil services examinations are designed in such a way that only the best candidates are selected for the various services. However, a separate examination for the IPS will yield better results.

ANY sincere and serious step towards revamping the entire police recruitment system is welcome. Sometime ago, while addressing police officers in New Delhi, Prime Minister Manmohan Singh called for reforms in the police establishment. Effective steps must be taken to plug the loopholes in the police recruitment process. A corrupt and tainted recruitment system will never produce honest and skilled police officers.



THE article Roots of discontent (Cover Story, October 19) indeed throws light on the various possible reasons for the violent upsurge in the Muslim world. Political observers have every reason to feel that the roots of discontent lie somewhere deep down.

Libya, for example, has witnessed an increase in sectarian violence since the death of Muammar Qaddafi. Benghazi has traditionally been a bastion of radicals who were suppressed ruthlessly by the Qaddafi regime. His death has given the radicals reasons to rejoice, and the results have not been very encouraging. Hatred against the pro-U.S. government is very clear.

Similarly, Iraq seems to have undergone a soft-partition between the Shia, Sunni and Kurdish populations, with the government having virtually no control over the north. Violence between Shias and Sunnis is on the rise every day and so is the discontentment against the pro-U.S. puppet government.

Pakistan, too, has seen anti-drone slogans at the demonstrations held against the documentary.

Despite elections, domestic tensions remain palpable in many countries. These tensions have been channelled into popular protests. And these protests are against the exploitation of the Muslim world, against the Islamophobia that unfortunately sweeps through the West.

FREEDOM of expression is absolutely essential for the survival of mankind. But irresponsible behaviour in its name will only bring disgrace and may defeat the very purpose of having that as a right.

Many see the growth of Islam as a threat. It surprises many how a religion with the tag of a backdated faith can have so many people embracing it. This may be a difficult proposition to accept for people who, without any valid reasons, have attributed the growth of Islam to military power and invasions.

Child marriage

DAREZ AHMED, the Collector of Perambalur district in Tamil Nadu, and his young team of officers deserve kudos for their role in preventing child marriages in the district (Preventing child marriages, October 19). They worked assiduously and in 18 months managed to prevent 125 child marriages.

That Darezs inspiration was Nobel laureate Amartya Sens essay Many faces of gender inequality speaks of the impact and power of well-intended words.

The redesign

THE redesign of Frontline and the inclusion of new and lively sections such as World View, Science Notebook and Data Card are very welcome and will be useful to those preparing for competitive examinations. The magazine's features and topics are useful to everyone. But I feel the increase in the cover price from Rs.25 to Rs.40 is a bit steep.

M. Rajeev Varman Nagpur, Maharashtra CORRECTION

In the Focus feature on Bhutan, the cost of the 720 MW Mangdechhu project (November 2, page 116) was erroneously given as Rs.380 crore instead of Rs.3,800.69 crore.

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