Kerala Assembly has passed a resolution against the planned LIC share sale
Thiruvananthapuram:
The Kerala Assembly has passed a unanimous resolution against the Centre’s move to sell LIC’s shares and privatize it. Demanding its continuation in the public domain, the resolution moved by Chief Minister Pinarayi Vijayan was passed unanimously.
LIC, which has performed well in the public sector, was started in 1956 with a capital of Rs 5 crore. Its price as of 31 March 2021 is Rs 38,04,610 crore. The amount is equivalent to the central government’s total budget estimate for one year and indicates the strength and growth of LIC, the proposal said.
After deducting all expenses from income, LIC saves an average of Rs 4 lakh crore every year and this is used for development activities, it said.
Rs 36,76,170.31 crore has been invested by LIC so far for the benefit of the society, the proposal states, adding that LIC is one of the leading organizations in the world for number of policies along with settlement of claims.
As a public sector undertaking, LIC has been protecting the interests of policyholders, and they get 95 per cent of the profits in the form of bonuses. This is much higher than that of private companies, the proposal said.
It is important to note that 24 per cent of LIC offices are in rural areas, while private companies have only 3 per cent presence in rural areas.
The resolution said that the central government is trying to justify its stand by saying that for now only 5 per cent of the shares are being offered through initial public offering or IPO and it is not privatization.
But it is clear that the sale of shares is the first step towards privatization, which is the ultimate objective of the government, the resolution said, adding LIC was nationalized to protect shareholders from exploitation by private companies, and to ensure For that the insurance cover reaches to the economically weaker and rural areas. It was also a means of utilizing the savings of the people for their development.
The Kerala Legislative Assembly said that the LIC Act has been amended by the Central Government by inclusion in the Finance Bill, without detailed discussion or examination in Parliament.
It said that it is of the opinion that privatization of LIC is not beneficial for the development and welfare of the people.
The Kerala Assembly then unanimously demanded the Center to withdraw its decision to sell LIC’s shares.