Insurance Companies Merger Plan: The Finance Ministry is considering a preliminary proposal to merge three government general insurance companies into a single entity, as the financial condition of these companies has improved significantly in the recent past. According to sources, the objective of this proposal is to ensure better efficiency, lower costs and greater scale in these companies.

Government investment in three companies

The government had invested a total of Rs 17,450 crore in Oriental Insurance, National Insurance and United India Insurance between the financial year 2019-20 to 2021-22, so that they could be brought out of the financial crisis.

In the budget for the financial year 2018-19, the then Finance Minister Arun Jaitley had announced the merger of these three companies into one entity. But in July 2020, the government postponed this plan and instead approved capital infusion of Rs 12,450 crore in the three companies.

Now the review has started again

Sources said that at present, after the improvement in the financial condition of the three companies, the Finance Ministry is conducting a preliminary review of their possible merger. The objective is to increase their efficiency and make their operations more robust.

Privatization plan also considered

Along with this, according to sources, discussion is also going on on the proposal of privatization of a general insurance company announced by the government. However, no final decision has been taken yet and various options are being evaluated.

Finance Minister Nirmala Sitharaman had announced a comprehensive privatization program in the Budget 2021-22, including the privatization of two public sector banks and one general insurance company. After this, in August 2021, the Parliament General Insurance Business (Nationalisation) Amendment Bill 2021 Passed, which cleared the way for privatization of government general insurance companies.

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