The Union government intends to make known to the world that the country is ardently committed to privatisation under neo-liberal dispensation through the Life Insurance Corporation of India (LIC) disinvestment, Former Finance Minister T.M. Thomas Isaac has said.
He also feared the disinvestment move could lead to a decline of social security commitments of the State-owned insurance behemoth.
Dr. Isaac was delivering a special lecture on ‘India’s public sector and privatisation: The future of LIC’ organised by Vakkom Moulavi Memorial and Research Centre in association with the Institute for Global South Studies and Research.
He said the 42 crores of policy holders of the LIC would become the “net losers” in the disinvestment process. Besides, despite achieving monetary benefit through the move, the government stood to forego future income and control over the vast resources estimated to worth ₹35 lakh crore.
Highlighting LIC’s distinctions that set it apart from other insurance firms, Dr. Isaac said the company was known for multiple commitments in terms of savings, provision for bonus, loans, and risk coverage. With disinvestment, policyholders would lose a safe investment option.
He also pointed to the possibility of the company curtailing the bonus component under pressure for greater profits. “Currently, 95% of LIC’s profit from both participatory and non-participatory policies could be given to policy holders as bonus. This is being reduced to 90% of the participatory policy,” Dr. Isaac said, adding that such a scenario could gradually render its policies unattractive.
Kerala State Planning Board member K. Ravi Raman chaired the session. Academics B. Ekbal, V. Mathew Kurian, K.M. Seethi, and Sameer Muneer were among those who spoke.
