If LIC had been listed on an Indian stock exchange it would have been the most valuable company in the country and a formidable one in the global market, said Finance Minister Arun Jaitley on Thursday.

He was addressing the audience at the inaugural event of the LIC’s Diamond Jubilee celebrations.

Jaitley said that size of LIC’s assets are huge and its network is unmatched in the country. It has the ability to reach every person in the country. LIC functioned as a monopoly organisation before 1991 and today it is a competitive player market.

Usually, in a market driven environment, the private sector has certain advantages but State-run companies are bound by certain processes and constraints but LIC has surmounted them and emerged as a leader, he said.

The Finance Minister pointed out that LIC was created as a monopoly organisation with the government nationalising all existing insurance companies in 1956.

In those days insurance business was treated as sacrosanct, and only the government or State companies were allowed to operate in that space. Private companies were not trusted as insurers then. But by the turn of the century private companies were allowed in the insurance business, he said.

‘Social security vital’

He hoped that as the economy picks up and the country becomes an insured and socially secured nation, LIC will play a bigger role. As the country moves from a developing economy to a developed one, the parameters of social security have to improve.

Becoming an insured and a pensioned society is one great component of that social security. The country has not realised how essential it is to have adequate society security, said Jaitley.

He regretted the fact that in the last one year, a Budget proposal to provide social security to private sector employees, had to be rolled back.

Even the Seventh Pay Commission had recommended a scheme for all government employees in which a minimal deduction in salary will lead to a great social security upon retirement. “But the unions are almost unanimous in opposing them,” Jaitley said. He said over time this resistance will fade away and people will realise the value of social security. And LIC will not only have greater relevance in the years to come but its business will also expand.

Also on the occasion, LIC chairman SK Roy handed over a dividend cheque of ₹2,502 crore for last fiscal year to the Finance Minister.

In 2014-15 the dividend was ₹1,634.90 crore.

Related Topics
comment COMMENT NOW