On Monday, the government clarified that there is no current proposal under consideration for the merger of public sector general insurance companies. In a written response to the Lok Sabha, Minister of State for Finance Pankaj Chaudhary confirmed that the government is not exploring any plans to merge these companies at present.
Financial Infusion in PSU General Insurance Companies
During the period from 2019-20 to 2021-22, the government infused a substantial Rs 17,450 crore into three public sector general insurance companies: Oriental Insurance, National Insurance, and United India Insurance. This financial support was aimed at bolstering their growth and enhancing their operational capabilities.
Previous Merger Proposal and Its Status
The Budget for 2018-19, presented by then Finance Minister Arun Jaitley, had announced a plan to merge these three insurance companies into a single entity. However, the merger process did not proceed as intended due to various factors, including the poor financial health of the companies involved.
Non-Performing Assets in the MSME Sector
In response to a separate inquiry regarding non-performing assets (NPAs) in the Micro, Small, and Medium Enterprises (MSME) sector, Chaudhary provided the latest figures. As of March 31, 2024, the total credit outstanding from Scheduled Commercial Banks (SCBs) to the MSME sector stands at Rs 28.04 lakh crore. Of this, Rs 1.25 lakh crore is classified as non-performing assets. The gross NPA percentage for SCBs in the MSME sector is 4.46%, compared to 2.74% for total loans and advances.
