Us Insurance Cos Ready To Plough Back Premia

The foreign insurance companies which are eager to come to the country will not mind a government regulation to invest within India 90 per cent of the premium they receive.

This was stated by John Wood, the US commercial counsel officer in Mumbai, at a press conference in the Indo-American Chamber of Conmmerce here yesterday.

Asked on the areas of interest for the American investors, Wood said infrastructure industries like power, roads and ports modernisation were the three main areas. All these are capital intensive.

The global pattern is that such projects are financed by insurance and pension funds. If the Government of India opens up the insurance sector, the premiums collected will be utilised to finance many of the infrastructure projects which interest US investors.

 

Referring to the joint ventures by LIC and GIC in at least 20 countries, Wood said it will be worthwhile to find out how much of the premium they collect abroad are invested in the respective countries. And, if India does not mind LIC and GIC to operate in other countries, there is no reason why foreign insurance companies could not come to India.

The chambers national president, Raghu Mody, mentioned the recent initiative by the US ambasador in India, Frank Wisner, to set up a venture capital fund of $100 million to develop the infrastructure in eastern India. There are suggestions that two more funds of similar size be created. The proposals, however, are still in a nebulous stage.

US consul-general in Calcutta Cheryl J Sim observed that after the end of the licence raj, there was the MoU raj. Indications are that there is going to be a study raj to suggestion solutions to various issues.

The solutions have already been suggested and it is time to act and implement them, she said.

West Bengal Chief Minister Asim Dasgupta painted a rosy picture of the economic ressurgence of Bengal. The state, which was the top industrialsed state of India, suffered a decline for various reasons from the mid50s to the early70s. However, the recovery curve which had been been almost flat in the early years, has started rising sharply in the last five years.

The scrapping of the iron and steel freight equalisation policy has started paying dividend by re-establishing the states locational advantage. The power sector has turned around. The market is likely to expand beyond the border of Bengal with the signing of the Ganga water sharing pact with Bangladesh.

The Haldia petrochemical complex will start producing ethylene and butadin by 1999, triggering off more downstream projects.

Dasgupta was bullish about striking oil and gas in the Bengal basis. He invited US investment for prospecting hydrocarbon in the basin.

Indicating a change of the government attitude towards losing state undertakings, Dasgupta said he has identified a dozen PSUs, of which three are making profit and at least six more must show profit. Or, we shall have to take other decisions.

The World Bank is lending Rs 900 crore for road development in the state. As for the Orissa experiment to privatise the power distribution, he said there are indications that everyone wants to bypass the rural areas. This is not acceptable.

Bengal, he said, has produced a new generation of middle class enterpreneurs who would like to do business with middle size US companies. The chamber will do well to help them.

The main features of the Arthur D Litle report on West Bengal were presented before the national audeince at the beginning of the meeting.

Rupen Roy of Price Waterhouse Associates who made the presentation, insisted that Bengals intellectual capital has not been highlighted to the foreign investors.

The state, Roy said, has not done too badly to attract foreign direct assistance of $49 million between August91 and September96, which places itself at the fifth position among all Indian states. It was, hopwever, important to go by the actual flow of FDI than what is just approved.