The Kerala Assembly on Wednesday passed a unanimous resolution against the Centre’s move to sell LIC shares. The resolution moved by CM Pinarayi Vijayan asked the Center not to privatize LIC and maintain the institution.
The resolution states that the insurance giant, 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 estimate of the central government for one year. It points to the strength and growth of LIC as per the resolution.
“After deducting all expenses from 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. It is important to note that 24% of LIC offices are in rural areas, while private companies have only 3% presence in rural areas.”
The resolution said that the central government is trying to justify its stand by saying that only 5% of the shares are being offered through IPO at present 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 without detailed discussion or examination in Parliament by including it in the Finance Bill.
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. The IPO is a 100% Offer for Sale (OFS) by the Government of India and there is no fresh issue of shares by LIC.
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