Three trade unions of Life Insurance Corporation of India (LIC) have requested Finance Minister Nirmala Sitharaman to withdraw the invitation of bids for appointment of pre-Transaction Advisors for the life insurer’s initial public offer (IPO).
They have also sought reconsideration of the government’s decision of disinvestment in India’s largest life insurer.
The three unions ― Federation of LIC Class I Officers’ Associations, National Federation of Insurance Field Workers of India (NFIFWI) and All India Insurance Employees’ Association (AIIEA) ― in a joint letter to the minister, emphasised that LIC generates an enormous investible surplus every year and hence, must remain 100 per cent under government control.
In the letter, the union reasoned: “The concept of ‘Peoples’ Money for Peoples’ Welfare’ will give way to maximisation of profits for shareholders. This is not in the interests of LIC’s 40 crore policyholders or the national economy.
“It is widely acknowledged that domestic savings play a very important role in national economies and many economists worldwide hold the view that foreign capital is a poor substitute for domestic savings.”
In a situation where the country needs huge resources for development, it is necessary that the government should exercise control over domestic, and more importantly, household savings, S Rajkumar, General Secretary, Federation of LIC Class I Officers’ Associations; Vivek Singh, Secretary General, NFIFWI; and Shreekant Mishra, General Secretary, AIIEA, said in the letter.
“We would like to stress again that the move to sell the equity of LIC will severely impact the economy and vulnerable sections of the Indian people.
“The social objective of providing insurance cover to the weaker sections will receive a setback. The aim to expand insurance in unprofitable rural areas too will suffer,” the three union leaders said.
Therefore, disturbing the character of LIC will harm the interests of the national economy and the poorer sections of the Indian population, they added.