The government is set to sell its 10 to 15 per cent stake in LIC. It can be announced in the budget next week. Two sources aware of the matter said that to improve the financial condition of government companies, the government is in the process of privatizing them.
Finance minister Nirmala Sitharaman had plans to sell government stakes in big companies like Air India, Bharat Petroleum Corp, but due to the coronavirus infection, it became very difficult this fiscal year.
However, the government now wants to speed up the task of selling the stake once again. The economy has plummeted to several decades due to coronavirus infection. In such a situation, the government wants to have a stake sale to increase income.
A source said that the government will have to change a parliamentary law to sell stake in LIC. To change this law, the government will have to get the approval of Parliament. LIC is currently managing over $ 400 billion in large funds.
The government announced a stake sale in LIC last year. But it is delayed due to legal and administrative challenges. According to a source, apart from LIC, the government can also sell its stake in IDBI Bank, Central Bank of India and Punjab and Sindh Bank.
In this case, the sources refused to give his name and the finance ministry spokesperson also did not give any statement.
Sitharaman Fiscal Year 2021-2022 budget is to be presented on Monday 1 February. On the condition of anonymity, an official said that the government wants the bad assets of state-run banks to be put in the proposed bad bank and later sold at a lower price when the market improves. This will help the banks to correct the balance sheet.