Ten Commandments

Ten Commandments to retain power
A simple lesson for ruling parties to keep on winning the election
(Readers are requested not to confuse this with the recent election results in Maharashtra)

1. Promise the people to make the state's capital into Shanghai and never fulfil that promise.

2. (a) Make sure that there is no popular leader or chief minister in the State.

     (b) Alliance partners always must keep pulling each other  and cut the other to size.

3. Provide sub-standard governance and visionless leadership.

4. Ensure that every day 1,800 people lose their jobs.

5. Keep three out of every eight residents below poverty line.

6. Ensure minimum of 40,000 farmers commit suicide.

7. Load-shedding and food security must be the biggest issues in rural areas.

8. Inequality between rural and urban should be maintained at 1 : 2.5.

9. Land-grabbing in various forms should be the biggest occupation of the state.

10.Ensure minimum average increase of the assets of the legislateurs is 339% during their tenure.

FOR WHOM THE (DEATH) BELL TOLLS ?

Recently I read one piece of article by Mr. M. Kunhikrishnan, Vice President, All India Insurance Employees' Association which has immense value of public interest. I reproduce the same for you to read.

FOR WHOM THE (DEATH) BELL TOLLS ?

After the 14th Lok Sabha elections in the year 2004, UPA – I Government assumed office with the support of strong left contingent of 61 MPs. To ensure Left’s support UPA had to agree to and approve of a Common Minimum Programme. In the CMP, it was enunciated that Public Sector Insurance Companies both Life and General would be protected and further strengthened as Public Sector institutions. Therefore, the UPA Government could not go ahead with their reforms agenda as they wished. But, when the left withdrew their support, consequent on signing nuclear pact abjectly surrendering country’s sovereignty, UPA Government took it as an opportunity to implement all reforms in financial sector with an indecent haste. As a part of their move, 2 Bills, viz, LIC (Amendment) Bill, 2008 and Insurance (Amendment) Bill, 2008 were introduced in Lok Sabha and Rajya Sabha respectively on 22.12.2008.

 The bill introduced in Rajya Sabha was to enact a comprehensive legislation amending Insurance Act, 1938, General Insurance Business Nationalisation Act 1972 and IRDA Act 1999. Maximum cap prescribed by IRDA Act for Foreign Direct Investment (FDI) is 26%. The proposed amendment seeks to hike this cap to 49% to enable foreign partners of the private insurance companies (Joint Ventures) to enhance their capital participation. It also provides for Public Sector General Insurance Companies (National, United India, New India and Oriental) to divest their equity if they wish to enhance capital base in future. The real intent is to disinvest equity of 4 Public Sector General Insurance Companies.

The Government wants to bring Life Insurance Corporation of India (L I C), the lone Public Sector Life Insurance Company in the country too under the ambit of Insurance (Amendment) Bill. The Government introduced L I C (Amendment) Bill 2009 in the Lok Sabha on 31.07.2009 in lieu of the Bill 2008 which lapsed following dissolution of 14th Lok Sabha with this objective. When we analyze the objectives of the bill re-introduced the privatization agenda of the Government would come to fore. The salient features can be summarized briefly as given below:

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  • Provide for raising of minimum capital of the Life Insurance Corporation of India from 5 crores of rupees to 100 crores of rupees which can further be enhanced to such amount as the Central Government may, by notification, determine.
  • Provide sovereign guarantee to the policies of the L I C of India to the extent to be determined by order, by the Central Government from time to time.
  • Allocate ninety percent surplus for the Life Insurance policy holders instead of ninety five percent as envisaged in L I C Act, 1956.
  • Empower Life Insurance Corporation to make regulations in respect of terms and conditions of the Agents.

Let us examine these in detail.

The proposed amendments are to conform L I C Act to the regulations of IRDA Act, 1999, the Government argues innocently. They go on to say that there are 21 life insurance companies functioning in the country in addition to L I C of India and that all the private companies have a minimum capital of 100 crores of rupees each. Hence the proposal to increase the capital base of L I C, the Government argues.

The IRDA Act stipulates that a life insurance company comes into existence after enactment of the Act must have a minimum capital of 100 crores of rupees. In other words, a life insurance company existing and functioning prior to the enactment of IRDA Act need not comply with this provision. Further, Life Insurance Corporation of India started functioning from 01.09.1956 as per the provisions of L I C Act, 1956, an Act adopted by the Parliament of the country, with a capital of 5 crores of rupees. Therefore, it is not at all necessary to enhance the capital as per provision of IRDA Act, 1999. Moreover, the then Prime Minister Pandit Jawaharlal Nehru and the then Finance Minister Sri. C.D. Deshmukh, the architects of public sector in India had a vision that the L I C may grow to such an extent where Government’s capital can be dispensed with at a later stage. They wanted Life Insurance Corporation to function as an autonomous body corporate with sufficient capital of its own. That is why they included a provision in L I C Act, 1956 to reduce the capital of L I C by the Government on the recommendation of the Corporation.

The question is whether further infusion of capital to the tune of 95 crores of rupees is necessary for L I C of India. As per provisional accounts as at 31.03.2009, the Life Insurance Corporation of India have assets worth 9 lakh crores of rupees. It has a liability of 7,75,000 crores of rupees. What way L I C would be benefited with an additional capital of 95 crores of rupees when it has a net asset worth 1,25,000 crores of rupees?

Even a layman can understand, the real objective of the Government is to privatize L I C of India. Equity worth 5 crores of rupees is not sufficient for disinvestment. In the year 1994, the committee headed by R.N. Malhotra recommended to Government of India to enhance the equity base of L I C to 100 crores of rupees and also to disinvest stocks valuing 50 crores of rupees. Due to the stiff resistance of Trade Unions, Political parties, especially the Left, the Malhotra Committee recommendations had to be kept in cold storage. The Government now wants to go ahead with disinvestment of LIC’s shares after enactment of Insurance (Amendment) Bill which has been introduced in Rajya Sabha on 22.12.2008.

Why the Government wants to withdraw the ‘sovereign guarantee’ enjoyed by Life Insurance Policies of LIC? They want to create a ‘level playing ground’ for the private players. Orchestrated demand of the private companies and the IRDA chairmen from time to time was withdrawal of sovereign guarantee of L I C policies. The Government now succumbs to their pressure.

L I C was formed in the year 1956 nationalising 245 private life insurance companies, both Indian and foreign. When the assets and liabilities of these companies were evaluated, it was found that the net liability exceed assets by 75lakhs of rupees. The Government then decided to provide sovereign guarantee to LIC policies to instill confidence to the investors. But, L I C never invoked this provision to meet its liability. LIC settled all the claims including large scale claims preferred following national calamities like Gujarat earthquake, tsunami etc. Despite the sterling performance of LIC, the Government intends to withdraw ‘sovereign guaranty’ to destroy the edge L I C has in the market. It is a fact that L I C garnered nearly 62% of market share of life insurance business of the country withstanding the stiff competition of the private players. Withdrawal of ‘sovereign guarantee’ is to mislead the clientele who reposed confidence in the public sector behemoth.

In addition to this, the amendment proposes to change the existing formula of dividing surplus of the Corporation derived after annual valuation. As of now, the policy holders are entitled to 95% of divisible surplus which are distributed to them as Bonuses. It is sought to be reduced by 5% making their eligibility to 90%. Naturally, the corporation would be constrained to reduce the rate of bonus payable to the policy holders. L I C is giving Bonus to the policy holders at highest rate at present. No private company can compete with L I C on this count. Barring one or two, all other private companies have incurred losses even after nine years of existence. They declare Bonus from share holder’s fund and not from the surplus derived after valuation of business performance. They want L I C’s capability to pay higher bonus to be pruned. Here also, the Government acts according to the wish of private players.

The move to delegate powers to make regulations in respect of terms and conditions of Agents to the Life Insurance Corporation may appear innocuous and routine. As per the present practice, change in the Agents Regulation, 1972 has to be vetted by Government. When these powers are delegated to the Corporation, it would enable the Corporation to frame or amend Agent’s rules according to the whims of bureaucrats. Recently, an amendment to Agents Regulation, 1972 was made effective from 09.07.2009 according to which each agent has to introduce 12 lives in a year and bring in a first year premium income of a minimum one lakh of rupees to keep the Agency in force. More than 50% of the existing agency force cannot fulfill this condition which may lead to their termination. Agents are apprehensive of the Corporation venturing for more stringent conditionalities. Unlike Agents working for private life insurance companies, L I C Agents are privileged to receive commission for the entire term of the policy until its exit from the books of the corporation. The management is toying with an idea to limit the period of payment of commission. Agents are viewing these proposed amendments as a Damocles’ sword.

L I C Act, 1956 empowers L I C to establish as many Divisional Offices and Branch Offices in each zone as the Zonal Manager may think fit. The proposed amendment seeks to omit this provision from the Act. As a business organization L I C may have to increase visibility to enhance marketing activities especially in the background of competition from private players. L I C cannot open new offices in the light of the proposed amendment. This would stifle L I C from broadening their servicing as well as marketing activities. It may ultimately benefit the competitors and this is the real motive of the Government.

Defeat the sinister design of the Government.

The first phase of demolishing public sector Life Insurance Company was over with enacting IRDA Act, 1999 whereby insurance sector was opened up for private participation. Now, UPA – II Government which continues to pursue neo liberal policies, wants to embark upon second phase of their attack by enacting L I C (Amendment) Act and Insurance (Amendment) Act. The ill conceived move can be resisted only by the united will of the people. Widest public opinion has to be created. As a prelude to organizing the people enmasse, we have to unleash a campaign amongst the various constituents of LIC, to educate the Employees, Officers, Development Officers and Agents and to brief them properly of the consequences of the amendments if eventually enacted.

L I C today has 26 crores of policy holders. We must win their confidence. They must be taught that whatever be the hurdles created by the Government, L I C is capable of meeting all the liabilities to the satisfaction of the clientele. We must be the vanguard of the ensuing campaign and struggles. If L I C employees organized under the banner of AIIEA cannot do it, who else can do it?  

Gekko Returns?

In actor-producer Michael Douglas' classic Wall Street released in 1987, the main character Gordon Gekko defined greed thus: "... greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind.” In the said movie, this dialogue added strength to the main character and with many such punches coupled with the way of portrayal of the character has earned nomination for Oscars then. But after two decades, when this dialogue is heard now, one may wonder whether it was just a coincidence or a precursor to what was to follow in future. Also one may wonder whether Gordon Gekko was a fictional character or a replication of future society. This doubt is inevitable if the present trend is looked at the background of Gekko's perception about money, love and life.

The present reforms era of economic liberalism, corporate activism and competitive consumerism, emphasizes the power of currency which completely changed social concept and societal outlook. When currency becomes the driving force of the human life, humanism vanishes from the human life.

Competitive consumerism, in its mad rush to reach the consumers, using the media - especially the all powerful visual media - as the bridge between the products and the customers, exceeds all boundaries in its publicity craze, diminishing the long cherished cultural values. For these advertisers love, marriage and life has totally different perception from the one that we have been taught in our primaries. In the world of publicity of competitive consumerism, an husband need not feel shy of exchanging his wife for a tray of ice cream cups. In this shadow world of idiot box, a girl need not feel guilty of changing his lover for a favorite toffee. In this advertisement world all it is needed for a boy to win over a girl’s heart is nothing but a branded inner garment. In this shameless world boys need not feel bothered to engage any number of girl friends all at the same time and same place as long as he keeps sufficient number of candies to offer; youth need not worry about dad’s scolding, if he has an MP3 compatible mobile in his possession; and lovers need not fear to run away from home right in daring vision of the girl’s father if they drive a low cost luxury car. With all these, can we say what is there for us to fear for or feel shy of? Can we tell our generation that a new demarcation of life has been laid for us to follow by these ads? Let us search our soul and mind and be honest in finding an answer.

Corporate activism is another thing which calls for an honest soul search. How many of the corporate employees can honestly tell that they have hundred percent job satisfaction? How many of the corporate employees can proudly claim that they spend sufficient time with their family and children? How many of them can candidly claim they are free of any stress? Is it not a fact that there were reports of some IT professionals committing suicide because of unbearable stress? Don’t we feel sorry for that old age couple who committed suicide as they could not bear the loneliness?

Sports, particularly cricket, is yet another field of corporate venture in recent time. The result of corporate entry into cricket is the recently concluded IPL T20 Cricket matches. For the first time in the annuls of sporting history, cricket players were put on auction like a commodity for this IPL cricket tournament. From the way in which corporate franchises were bidding for the players based on their popularity rather than their actual cricketing worth, it is clearly evident that it was business transactions and had nothing to do with each player’s ability. In his report Arnab Mitra, who has written a study on the IPL says “If broadcasting rights, franchise fees and central sponsorships are combined, there will be a fixed yearly income for BCCI. Plus, there are no cost pressures on the body due to stadium leasing expenses or any hikes in the salaries of players. This will lead to it more than doubling its profits in the very first year. The forecasted profit for BCCI over the next 10 years is a whopping Rs 43 billion!” There are news reports which say, “(1) Over 200 million Indian viewers, 10 million international viewers and 4 million live audience watched IPL; (2) A 10-second ad spot during IPL cost Rs 2 lakh to start with, and went for Rs 10 lakh in the final; (3) IPL will bring in about Rs 12 billion every year in cricket; (4) India's total sports budget last year was Rs 4.9 billion; BCCI will earn Rs 3.5 billion from the first year of IPL, which is more than the Rs 2.3 billion it earned in 2007.” Another news report says that Dhoni had scored 414 runs at an average of 41.40 in 14 innings in IPL and each run that flowed from his blade was worth Rs 1,44,927. According to a news portal report “over four million spectators watched IPL matches in stadiums. On TV too, the TRP (Television Rating Point) of these matches was a mind boggling 8.2 in the first two weeks, 8 at others and was always above 5. That's when saas-bahu soaps like Kyunki Saas Bhi Kabhi Bahu Thi have averaged at 5, and SRK's Paanchvi Paas has seen TRPs of 4.” So, commercially IPL matches were big hit one should admit. But for cricket and sport, is it a boon or bane? While some former cricketers like Wasim Akram have criticized the IPL, analysts expressed fear that it might kill other formats of cricket.

The corporates’ entry into cine field has also stirred controversy as seen in Tamil cinema industry. According to the Tamil Film producers, it was the entry of the corporates in film industry which increased the actors’ remuneration to manifold which in turn increased the cost of film production to an unbearable limit. Though there was denial about this from the film artists’ association, the fact remains that there are accusations from one section of the industry. Nobody can dispute the corporates’ contribution in the country’s economic growth, but still is it not equally essential for its people also grow healthily? Can money alone ensure their health and happiness?

With economic liberalization in operation, now the currency has become the most sought after commodity in our life. Now that it is repeatedly told that there is no alternative(?) to liberalization, people also understand the message in it. If the State can sacrifice all its holdings for the growth of economy, then why not people too follow the example? But what is there for ordinary human to sacrifice except humanism? With currency taking the front seat people also think there is no alternative to earn the most sought after commodity called currency except by sacrificing whatever they have in exchange for money.

Is it not a fact that for Lal Babu of Nagwan village, Rs.7500/- was the consideration amount for killing his sixty years old father Sudeshwar Ram? Was it not money for the IAS aspirant Vipul to pursue his studies that prompted him to kill his fifty five year old mother Kailash Devi of Delhi? Was it not the desire to have a regular monthly income through compassionate ground appointment in Hyderabad Municipal Corporation that took Yadaiah and his wife Renuka to the extreme step of plotting to murder the former’s fifty two year old mother Narsamma? Was it not the same reason of getting an appointment through compassionate grounds in Government services that forced Shankar Oraon of Ranchi to make his father to drink heavily and then beat him to death? For Chandrasekhar of Anantapur, Shyam of Delhi and Suraj of Raipur who have killed their fathers, is it not the same money that prompted them to plot the murders? According to news reports, the killing of the foster son in law of former chief minister of Tamil Nadu was also due to property dispute. If it is proved to be true in the court of law, then it means that this trend has intruded into the elite class too.

These may be a few stray incidents which cannot be generalized. But still it is distressing and difficult to digest. Or is it the return of Gekko? Let us hope it is not and ensure that today’s precedents do not become tomorrow’s practice. After all a healthy economy is for the health of the society and happiness of the people. Should we not make it certain?

C.T. SURESH KUMAR.