THIRUVANANTHAPURAM: The Kerala Assembly on Wednesday unanimously passed a resolution calling on the central government to rescind its move for disinvestment in the Life Insurance Corporation (LIC) and maintain the company in the public sector.
Introducing the resolution with full backing of the house, Chief Minister Pinarayi Vijayan said the central government has amended the LIC Act by including it in the financial bill and without due deliberation in Parliament. "Leaving LIC to the interests of private investors is not good for the country. Hence the central government should back off from selling its shares and maintain the company in the public sector," the resolution said.
The CM said LIC's assets are valued at Rs 38,04,610 crore, which is equivalent to the central government's one-year budget estimate. Each year, on an average, the LIC is making a profit of Rs four lakh crore and that's being used for the developmental activities of the country. The insurance corporation has so far invested Rs 36,76,170.31 crore benefiting the society. he said.
"The privatisation will result in the extinction of this huge source of resources," said the CM.
A firm that always focused on the interests of policy holders, LIC gave 95 percent of its profits to them as bonus. This is more than what private companies pay. 24 percent of the LIC offices are in the rural areas, while the rural presence of private insurance firms was just three percent.
The CM said the central government's claim was that only five percent shares are up for Initial Public Offering and that is not part of privatisation. "But sales of shares are the first step of privatisation. LIC was nationalised to end exploitation of policy holders from private companies and to extend insurance coverage to rural areas and marginalised sections," he added.