LIC 'disinvestment': Outrageous idea

The biggest bombshell in Finance Minister Nirmala Sitharaman’s Budget speech lay in something the Finance Minister does not even have the authority to do: the proposed sale of a portion of the government’s “stake” in Life Insurance Corporation of India. Nirmala Sitharaman’s perfunctory statement, “The government now proposes to sell a part of its holding in LIC by way of an initial public offer,” is vacuous for the simple reason that the government, apart from the initial equity of Rs.5 crore in 1956, has never ever made any investment in LIC to now stake a claim to ownership of the corporation, its assets or its reputation. The only tangible response was in the vague statement by Finance Ministry bureaucrats that the “privatisation” would happen only towards the latter half of the next financial year—clearly indicating the government’s realisation that selling LIC was not immediately possible. How this would be done or what would happen to LIC’s assets, over which the government can legally stake a claim to the extent of 5 per cent only, remain vexatious issues about which no one in the Modi regime seems to have even thought about. The union also plans to use the LIC Policy Holders’ Councils within LIC’s existing structure, meant for redress of policy holders’ concerns, to mobilise opposition to escalate resistance to the proposal.