The Kerala Assembly on Wednesday unanimously passed a resolution against the Centre’s move to sell LIC shares. The resolution moved by CM Pinarayi Vijayan has asked the Center not to privatize LIC and maintain the institution.
The proposal states that the insurance company, which was started in 1956 with a capital of Rs 5 crore, is doing well in the public sector and is valued at Rs 38,04,610 crore as on March 31, 2021. This amount is equal to the total. Budget. The Central Government Estimate for one year shows the strength and growth of LIC as per the resolution.
“After deducting all expenses from the income, LIC saves on an average around Rs 4 lakh crore every year. It is used for development activities of the people,” it said.
Rs 36,76,170.31 crore has been invested by LIC so far for the benefit of the society, the proposal said adding that LIC is one of the leading organizations in the world for claims settlement as well as multiple policies.
As a Public Sector Undertaking, LIC has been protecting the interests of policy-holders who are given 95% of the profits as bonus. “It is higher than that of private companies. Significantly, 24 percent of LIC’s offices are in rural areas, while the presence of private companies is only 3 percent in rural areas.
The resolution said that the central government is trying to justify its stand by saying that at present only 5 per cent of the shares are being offered through IPO and it is not privatization. It is clear that the sale of shares is the first step towards privatization, which is the ultimate goal of the government, the resolution said.
It said that the Central Government has amended the LIC Act by including it in the Finance Bill without detailed discussion or investigation in Parliament.
The Center had in February filed a draft letter with capital markets regulator SEBI to sell 5 per cent stake in LIC through an initial public offering. IPO is 100% Offer for Sale (OFS) by Government of India and there is no fresh issue of shares by LIC.
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