The assembly on Wednesday unanimously passed a resolution opposing the initial public offering (IPO) of Life Insurance Corporation (LIC), billed as the country’s largest initial public offering.
The resolution, presented by Prime Minister Pinarayi Vijayan, called on the center to keep LIC in the public sector and drop the divestment plan.
The LIC’s fortune – ₹38.04 lakh crore – is almost the size of the centre’s annual budget. The public sector company has so far invested £36.76 million for the wellbeing of the people and the development of the country. With the divestment of LIC, the country would lose one of its greatest public sector resources that could be used for the good of the country, the resolution said.
The LIC has paid out 95% of its profits to policyholders as a bonus, which is the highest rate provided by an insurance company. Around 24% of LIC offices were located in rural areas, where the rural penetration of private actors in this sector is 3%. Although the center had claimed that only 5% of the shares would be sold through the IPO, it is very clear that the IPO is the first step before privatization, the resolution said.
A company that used its assets for the welfare of the people and the development of the country was privatized without even conducting a detailed discussion in Parliament by including the amendment to the LIC Law in the Finance Law. Therefore, the center should be ready to drop the divestment plan as the company would not benefit from the IPO, the resolution said.
Comments are closed.