The Union Cabinet had last year cleared the proposal to infuse capital into National Insurance, Oritental Insurance and United India Insurance.

Taking a step further, the government recently sought the Parliament’s approval for gross additional expenditure of Rs.6.28 lakh crore for 2020-21 as part of second and final batch of supplementary demands for grants. This also includes Rs.3,000 crore for the recapitalization of the general insurers.

As per IANS reports, the supplementary grants are required for “providing additional funds towards recapitalization of insurance companies (Rs.3,000 crore)”, said the second supplementary demands for grants for 2020-21.

This bid is a move to improve the financial condition of the state-run general insurance companies. The infusion will be done after the supplementary demands for grants is passed by parliament which will reconvene on March 8.

In the Union Budget for 2021-22, Finance Minister Nirmala Sitharaman also announced the government’s agenda to privatize a general insurance company in the upcoming financial year.