The government has given a big statement regarding the privatization of the Life Insurance Corporation of India (LIC). The government on Monday assured the Lok Sabha that it did not intend to privatize LIC. The government has planned only one IPO to increase its share in the country’s largest life insurer market and bring in more investment for the better prospects of its policyholders.
Minister of State for Finance Anurag Thakur reminded the opposition that his government had applied a moratorium on loan repayment to banks when the corona epidemic hit the country. Similarly, the insurer may consider providing relief if people have difficulty in the continuous payment of LIC premium.
No one from LIC’s IPO will lose their job
While answering the question on LIC disinvestment, the Minister of State for Finance said, “We are only bringing an IPO.” The limit to reduce the share is not yet fixed. He said that due to the proposed IPO, no one will get a job in LIC.
He said that in 2017-18, the insurer generated a surplus of Rs 48,436 crore, of which Rs 46,014 crore was shared with the policy holders and Rs 2,421 crore with the government. At the same time, a surplus of Rs 53,954 crore was generated in 2019-20, out of which 51, 257 crore rupees were given to policy holders and the remaining 2,697 crores to the government.
Authorized capital will increase before IPO
The government has proposed to increase the authorized capital of LIC to Rs 25,000 crore, which will help in the listing of the company in the next financial year. Currently, the paid-up capital of the life insurance company with 29 crore policies is 100 crore rupees. LIC was started in 1956 with an initial capital of Rs 5 crores. The asset base of LIC is Rs 31,96,214.81 crore.
Explain that Finance Minister Nirmala Sitharaman had announced in the speech of Union Budget 2021 that the IPO of LIC will come in the year 2022. He said that legislative amendments to this effect will be introduced in the Parliament in the budget session. The government plans to sell 10 per cent stake in LIC. The government has set a target of disinvestment and privatization of Rs 1.75 lakh crore for the financial year 2021-22.