The employees, carrying banners and chanting "Take Back the Bill", marched through the Capital to the Parliament building, where the winter session of the Lok Sabha was convening.

"The decision of the government to allow private sector participation in mutual funds, provident funds and banks would not lead to any economic development of the country,"said All India Insurance Employees Association (AIIEA) general secretary NM Sundaram, adding that privatisation was a mode of selling the "economy to a few multi-national companies".

The employees union would intensify their agitation if the government did not take back its proposals to privatise the insurance sector, he said and added that a nation-wide strike would be launched to oppose privatisation.

The Bill to open the insurance business toprivate and foreign participation was introduced in the Lower House of Parliament last month. But it met with opposition from lawmakers on the left and regional parties.

EAS Sarma, secretary, department of economic affairs, told a seminar that the Bill would not hurt employees.

"The insurance reform measure does not seek to disinvest any part of the government's holding," Sarma said.

"It only seeks to permit private firms' entry into the sector, foreign firms can only enter as a joint-venture partner and their stake is capped at 26 percent," Sarma said.

"We hope to get the IRA (Insurance Regulatory Authority) Bill passed with a majority," Prime Minister Atal Bihari Vajpayee told reporters in an informal meeting in Parliament on Monday.

Ministers of the ruling coalition have said they are confident the Bill will be passed by Parliament.

Numbers favour the government, which has the support of 303 members in the 545-strong Lower House. However, the Insurance Bill could stumble in the Upper House,where the ruling coalition parties are in a minority.

Agitated left party members said the Bill should be referred to a joint select committee of Parliament and staged a walk out from the Lower House of Parliament.

"It is nothing but infringement of the country's sovereignty, the Bill should be referred to a joint select committee of Parliament," said Ajay Chakraborty of the Communist Party of India (CPI).

A petition signed by 15 million people was submitted to the speaker of the Lower House against the government's move to open up the sector, a CPI (Marxist) lawmaker said.

KV Kamath, managing director and chief executive officer of ICICI Ltd said he expected distinctions between banking and insurance to break down as a result of the opening up of the insurance sector.

"Soon there will be no banking or insurance industry, it will all be known as financial services," he said. "Firms will need to cross-sell products to survive."

Kamath said the new environment would present challenges to regulatoryauthorities and that they must keep pace with changes.

"The rules of the game are being rewritten and you will now need a regulator who can cover all the areas," he said.