Money & Banking

Unions, including BMS, oppose plans for LIC stake sale

AM Jigeesh New Delhi | Updated on February 01, 2020

Trade unions are up in arms against the announcement in the Budget to raise revenue by selling government’s stake in the Life Insurance Corporation of India. Employees took out protest rallies at various offices of the LIC across the country and decided to go on a one-hour walkout strike as an immediate action on February 4.

The President of the All India Insurance Employees’ Association (AIIEA), the largest union of LIC employees, V Ramesh told BusinessLine that the announcement is a blatant violation of the Insurance Act and any change in the structure of the LIC should be done only after approval of Parliament. He said workers will oppose the move tooth-and-nail and said future programmes, including indefinite strike, will be charted out after consulting other unions.

At present, the government holds 100 per cent stake in the LIC. “The domestic savings of the policyholders helps capital formation and is utilised for developmental activities in the country. The immense contribution of LIC to the Five Year Plans, investments in social sector to the tune of more than 80 per cent of its total investment for the last 68 years will receive a great set back with this move of the government,” AIIEA said in a statement. Ramesh said the move is against the national interests.

He said the LIC has recently paid a dividend of ₹2,611 crore to the Centre against an initial equity of ₹100 crore. “The LIC also has the proud distinction of contributing more than 25 per cent to the total budgetary efforts of the Government of India. Selling part of LIC’s stake to private interests and its disinvestment would be a sure blow to the resource mobilisation efforts,” the AIIEA said.

The BMS said it will oppose the move. “We strongly oppose it. We will go through the budget and chalk out some agitation programmes,” BMS leader Girish Arya said.

Political parties have also questioned the move.

CPI(M) General Secretary Sitaram Yechury said, “This is the first time in the history of India that the LIC is being privatised. The whole struggle in the fight against privatisation of the insurance sector is because the future of every individual who puts in his life savings in the insurance company is at stake now. This is a very clear effort from the Government to try and overcome their revenue shortfalls through extra tax collections. And in that extra tax collections, the main focus will be privatisation. So selling the family silver to meet their daily expenditure makes neither economic sense nor common sense.”.

Published on February 01, 2020

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