§ Mr. Skeetasked the Secretary of State for Foreign and Commonwealth Affairs, following the nationalisation of general insurance in India, whether compensation has been paid to the British companies divested of their assets; and whether provision has been made for the repatriation of funds.
§ Lord BalnielOwnership of general insurance companies in India passed to the General Insurance Corporation of India on the 2nd January 1973 by virtue of the passage of the General Insurance Business (Nationalisation) Act 1972. This Act specified the amount of compensation payable to the owners of the companies, such compensation to be payable by 31st March 1973.
The British insurers were dissatisfied with the amounts of compensation payable for the acquisition of their Indian businesses, and also with the scale of tax on these amounts proposed by the Indian authorities. Representations in support of the British insurers on both these issues have been made on various occasions to the Government of India.
A final decision on the tax position has not yet been received from the Indian Central Board of Direct Taxes, though the date set for payment of compensation has passed. The British companies concerned have, in the meantime, agreed that payment be deferred until the end of June 1973 on the understanding that interest will be payable from 31st March 1973 on the amounts to be paid as compensation and that this accommodation on their part will lead to prompt repatriation of all amounts due.