The Assembly on Wednesday unanimously passed a resolution against the initial public offering (IPO) of the Life Insurance Corporation (LIC), which is billed as the country’s biggest ever initial share sale.
The resolution moved by Chief Minister Pinarayi Vijayan urged the Centre to retain LIC in the public sector, dropping the disinvestment plan.
The asset of LIC -- ₹38.04 lakh crore -- is almost equal to the size of the annual budget estimate of the Centre. The public sector undertaking could invest ₹36.76 crore so far for the welfare of people and development of the country. With the disinvestment of LIC, the country would lose one of its largest resources in the public sector which could be utilised for the welfare of the country, the resolution said.
The LIC has been giving 95% of its profit to the policyholders as bonus which is the highest rate being provided by an insurer company. Around 24% of the LIC offices were in the rural areas, where the rural penetration of private players in this sector is 3%. Though the Centre had been claiming that only 5% of the shares would be sold through the IPO, it was very clear that the IPO was the first step before privatisation, the resolution said.
A company which used its assets for the welfare of the people and development of the country was being privatised without even holding a detailed discussion in Parliament by listing the amendment of the LIC Act in the Finance Bill. Hence, the Centre should be ready to drop the disinvestment plan as society would not get any benefit from the IPO, the resolution said.
