‘Selling LIC’s stake will destroy the economic security of 40 crore Indians’

Selling LIC’s stake will wreck the economic security of 40 crore citizens (one-third of India’s population), which the government is not able to provide otherwise, said the LIC Agents’ Organisation of India (LICAOI).

LIC has been providing policyholders this security over the past 64 years, said PG Dileep, General Secretary, LICAOI.

Any stake-sale has to go through certain sets of processes and procedures. First of all, Parliament has to pass the Budget. Then, an amendment Bill has to be brought up, which needs to be passed by the Lok Sabha and Rajya Sabha. After the Bill becomes an Act, it has to be approved by the SEBI and IRDAI. This will be referred to the board of the LIC, which has to accept it, following which it will be listed in the market. Once the sale of one tranche takes place, future sales will need only a Cabinet decision.

While the Centre’s investment in LIC is merely ₹5 crore, its present asset value is ₹31.5- lakh crore and the Life Fund ₹29.8-lakh crore. Dividend paid to government last year is ₹2,418.98 crore and ₹26,008 crore over the last 17 years.

The LIC’s basic slogan has been ‘Peoples’ Money for Peoples’ Welfare.’ Ninety-five per cent of its profit is shared with policyholders as bonus. Only balance five per cent is given to government as dividend, Dileep pointed out.

The LIC has deposited ₹10.34-lakh crore in government securities. Investments in the state social security sector is ₹8.44-lakh crore and ₹2.61 lakh crore in the central social security sector. Other significant investments include ₹54,285 crore (housing); ₹65,620 crore (roads, ports, bridges and railways); ₹1.08 lakh crore (power); and ₹1,500 crore (irrigation, water supply and sewage).

LIC has also also offered to give ₹70,000 crore on a long-term basis at very low interest for railway development. The insurer’s claim settlement has been a global model, with track record for the last 15 years being 98.35 to 99.99 per cent.