Hyderabad, Jul 30 (Mayank Nigam) All India Life Insurance Corporation of India Employees Federation General Secretary Rajesh Kumar said if the LIC is going to be disinvested by the Government of India, it will betray the commitment given to the people at the time of its Nationalisation and it will be a violation of the Constitutional commitment about the social security to the common people. Delivering his lecture on ‘Don’t Kill LIC’ on the 29th day of the month-long AIBEA National Webinars to commemorate the 52nd anniversary of Bank Nationalisation on theme ‘Vibrant Banking for Vibrant India’ and focus ‘people’s money for people’s Welfare’, on Thursday night, he said Finance Minister Nirmala Sitharaman gave four reasons for disinvestment in LIC like it will discipline its functioning, LIC will be able to access more capital, it will benefit of retail investors and will become more transparent.
Stating that this is hypocritical and misleading, Mr Kumar exposed the fallacies and claims of the Finance Minister stating, If listing of a company will make the company more disciplined, ‘why did the Yes Bank failed, why did DHFL failed and many more companies. Hence, the claim that it will discipline the functioning of LIC is false and LIC is definitely disciplined and no major problems of functioning are prevalent even today’. As on date, the annual income of LIC is Rs.6 lakh crore and the total assets of LIC is Rs.32 lakh crore and therefore, the reason that LIC requires capital is also not correct, he said LIC is adequately capitalized. Mr Kumar said the country’s population is 130 Crore and out of which, only 18 million in India are investing in stock market.
When LIC gets disinvested, only 18 million will be benefited as retail investors and not all the 130 Crore people. Hence, that the retail investor will be benefited will also not hold water, he added.
As far as transparency is concerned, LIC is adhering to all the guidelines issued by the Regulators and Authorities and is already more transparent than any of the private firms. The Federation General Secretary said If public sector is going to be disinvested, inequality will increase, social unrest will increase. We had programmes on the attacks of the financial sector like banks, life insurance sector, general insurance sector, Mr Kumar said we should give more programmes and we should create the impact by organizing more struggles. The government is going ahead with disinvestment in LIC but we are also carrying forward our struggles. But what is required is that unity of not only the public sector but also the working class at large and through our struggles, we will be able to defeat the policies of the Central government. We shall be able to oppose not only the privatisation of the public sector banks, disinvestment of LIC, privatisation of General Insurance Companies, but also selling away of other public sector units. This is nothing but selling the national assets, he asserted. In 1956, when Life Insurance Corporation was born on September 1, that started mobilizing the people’s money to the country and providing social security to the underprivileged and backward people.
The insurance companies were brought under public sector through two Ordinances and due to which 154 Indian private insurance companies, 16 Non-Indian Insurance companies and 75 Societies were taken over by the Government of India. The primary goal of the Life Insurance Corporation of India was and is to serve the public, Mr Kumar said, When LIC has been the biggest contributor in nation-building especially when no private investment is coming forth for the infrastructure, the disinvestment is ”not at all necessary”. If the disinvestment takes place, how LIC will change and how the policy holder will be affected is to be understood. The policy holders are eligible for 95% of surplus in the form of bonus that is being distributed now and this will undergo a change after the disinvestment. After the IPO is brought about, the 95% surplus that is being given to the policy holders will come down to 90%. If the much-awaited LIC Initial Public Offering (IPO) comes about, who will invest in the infrastructure, which have long-term gestation period and returns are also slow and less. The private corporates, who will subscribe to the IPO will definitely get the investments of LIC away from infrastructure. He congratulated AIBEA for being one of the most vibrant trade unions amongst the middle-class trade union movement in India and referred to AIBEA as a pioneering organisation right from its inception in 1946.
Mr Kumar recalled the sacrifices and contributions of the stalwart leaders who led the movement of AIBEA in the past and who were responsible to building the mighty edifice of AIBEA. The Federation General Secretary expressed his deep condolences over the demise of so many bank employees during the Covid pandemic and commended the bank employees all over the country for continuing to extend banking services during this challenging period despite all odds and risks to their lives. He said when the banks were Nationalised on July 19, 1969, it transformed the scenario from class banking to mass banking and added Mr Viral Acharya, former Deputy Governor of Reserve Bank of India, in an interview, stated that majority of the Corporate Sector have shifted their accounts to the public sector banks from the private sectors. If the private banks are so good, why even the Corporate Sector is banking with the Public Sector Banks. This is the crux and truth. For serving the common people of the country and the rural sector, public sector banks should play a major role and it should be in the hands of the government and should not be privatised, he added.