Finance Minister Nirmala Sitharaman said on Saturday that Life Insurance Corporation’s proposed listing as part of the government’s divestment drive will improve the company’s administration and accountability. Her comments come days after she presented the Union Budget for financial year 2020-21, in which the government announced plans to sell some of its 100 per cent stake in LIC in a move that could result in the partial listing of the country’s largest insurer. Set up in 1956, LIC currently controls a majority share in the life insurance market in the country.
“The percentage of public listing is yet to be decided,” said the Finance Minister.
Paring its stake in the state-run insurance behemoth will help the government meet its divestment target, which has been increased to Rs 2.1 lakh crore in the fiscal year ending March 2021, from Rs 1.05 lakh crore in the current fiscal year.
In the Union Budget, the government said that it planned to earn Rs 90,000 crore through stake sales in state-owned banks and financial institutions, without providing a roadmap for listing LIC.
This week, trade union All India LIC Employees Federation staged an hour-long walkout strike to protest against the proposed stake sale in the insurance company.
The government has said that the listing of LIC may be done in the second half of next financial year and will help deepen the equity market. It has also maintained that the listing of LIC will help bring in greater transparency and public participation, and deepen the equity market.
LIC chairman MR Kumar told NDTV on Friday that the divestment of LIC by the government would not cause any problems for the company’s employees.