The Kerala assembly has passed a resolution against the planned LIC share sale
The Kerala assembly has passed a unanimous resolution against the centre's move to sell LIC shares and its privatisation. Demanding for it to continue in the public sector, the resolution moved by Chief Minister Pinarayi Vijayan was passed unanimously.
LIC, performing well in the public sector, was started in 1956 with Rs 5 crore capital. As on March 31, 2021, its value is Rs 38,04,610 crore. This amount is equivalent to the central government's one-year total budget estimate and points to the strength and growth of LIC, the resolution said.
After all the expenses from the income is deducted, LIC every year makes savings of Rs 4 lakh crore on an average and this is used for developmental activities, it said.
The investment by LIC for the benefit of society till now has been Rs 36,76,170.31 crore, the resolution said, adding LIC is among the leading organisations in the world for settlement of claims as well the number of policies.
As a public sector undertaking, LIC has been the protecting the interest of policyholders, and they are 95 per cent of profit as bonus. This is much higher than what private companies provide, the resolution said.
It's important to note that while 24 per cent of LIC offices are in rural areas, private companies have only 3 per cent presence in rural areas, it said.
The central government is trying to justify their stand saying that only 5 per cent of the shares are being offered through initial public offering, or IPO, for now and that this isn't privatisation, the resolution said.
But it is obvious the sale of shares is the first step to privatisation, which is the ultimate aim of government, the resolution said, adding LIC was nationalised to protect shareholders from exploitation by private companies, and to ensure insurance cover reaches the economically weak and rural areas. This was also a means to use the savings of the people for their development.
The LIC Act has been modified by the central government by including it in the Finance Bill, without even a detailed discussion or examination in parliament, the Kerala assembly said.
It said it is of the opinion that privatisation of LIC is not beneficial for people's development and welfare.
The Kerala assembly then unanimously demanded the centre to withdraw their decision to sell the shares of LIC.