Mahesh Chander Sudan
We, the people of India, have witnessed presentation of annual budget for next financial year where in Finance Minister Nirmala Sitharaman proposed to divest part of the Government stake in life Insurance Corporation of India through IPOs (Initial Public Offering). It appears that the Government is trying to make most of the brand value of LIC, as it is one of the few remaining profit making entities owned by the state. LIC is a largest financial institution with assets worth around thirty trillion rupees under her management. Having been formed in the year 1956 with a mere Rupees five crore by Indian Government, LIC is serving nation by mobilizing people money for people’s welfare and has earned confidence of around forty crore policy holders who could secure social security through Life Insurance Corporation of India. Mobilizing people’s money for people’s welfare in true spirit of serving the people and Nation is the cardinal objective of the corporation. Total fund invested for the benefit of the community at large stands around Rs. 29.84 lakh crores and it speaks about her journey since 1956, highlighting the vision of the leaders like PanditJawahar Lal Nehru who could guide the people of India to be self-reliant in creating social security through LIC not only for its policy holders, but it also generated a huge fund for Government welfare schemes. Cumulative dividend paid by LIC to Government of India for her investment of Rs. 100 crores works out to Rs. 26005 crores from 1957 to 2019 and it presents adequate evidence to acknowledge the contribution of LIC in nation building.
A large force of LIC agents numbering around 12 Lakhs besides1.2 Lakh permanent corporation employees is involved to raise a huge resource to support financial market and economy of the country for creating direct and indirect employment across the country, hence this profit making entity of the government of India is providing yeoman service to the Nation. The corporation has the credit of supporting all five year development plans besides extending housing loans to its members and to the housing sector with most economic consumer friendly repayment schedules. We, the people of India, therefore feel compelled to visualize any structural change in the management of the corporation as it involves a solemn sovereign pledge administered mutually between the policy holders and the corporation. Divesting part of Government stake through IPOs may not be certain way to privatization at the movement but it ultimately indicates the intention of the present government thereby affecting deep routed faith of the people who insure their life for the well-being of their near and dears. No amount of justification can permit misuse of “Widows Money”. It may fetch good dividend to public exchequer for one time at the cost of solemn faith of the people of India. The logo of the corporation rightly depicts that your welfare is my concern and touches all spheres of economic journey of the Nation. There is hardly any government or private bank where LIC does not hold stake. There is no financial sector left who has not availed investment from LIC.
We, the people of India, strongly feel that withdrawal of Government stake through IPOs or otherwise would ultimately convey wrong signals amongst future depositors that would jeopardize growth of LIC and may affect creation of job opportunities in the sector at large. This would certainly impact balance sheet of the profit making public entity that strengthens the solemn faith of the policy holder across India as it undertakes to provide inherent safety to their near and dears. We fail to understand as to why a milking cow is put on sale, just because it shall fetch more remuneration. As it stands insurance sector has been opened to market for seeking investment from national and international investors and LIC has established herself by attracting large share of the insurance sector. Hence, it is prudent enough for Government to continue holding large stake for the interest of the corporation, its employees, agents and the economy of the country at large. Let us not compromise the interest of the people of India just for short term gain of generating funds for managing immediate financial crisis. The corporation has grown to the present size over the years through sustained participation of 400 million policy holders who are bestowed with solemn guarantee for their hard earned money by Government of India.
(The author is WgCdr (Retd)
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