NEW DELHI: The Life Insurance Corporation of India (LIC), the golden goose that has come to the rescue of the government time and again, has cumulatively invested Rs 25 lakh crore as of March 2020 in the public sector.
According to latest data (provisional) from the Reserve Bank of India (RBI), the state-owned insurer’s share of investment in public sector entities shot up to 84.6 per cent from about 73.8 per cent a decade ago, translating to a near 15 per cent annual growth in LIC’s public sector investments over the past decade.
To be sure, a bulk of the investment was made under the Modi government. LIC’s investments in the public sector rose from Rs 13.4 lakh crore in FY15 to Rs 22.6 lakh crore in FY19—the first term of Prime Minister Narendra Modi’s NDA government.
From lending a helping hand in many of the government’s stake sales in a wide variety of public sector companies to bailing out fund-starved sectors such as railways, road or power, LIC has been the financial muscle behind much of the investments.
For instance, the government sold equity stakes in BHEL, Engineers India, MMTC, New India Assurance, General Insurance Corporation of India and Hindustan Aeronautics. By swooping in to mop up the shares on offer, the insurer in turn, helped the government with its disinvestment targets. Last year, LIC also increased its equity stake in state-owned IDBI Bank.
Constrastingly, the state-run insurer’s cumulative investment in the private sector stood at just Rs 4.5 lakh crore, taking total investment to Rs 29.57 lakh crore at the end of FY20. LIC’s share of investments in the private sector stands at just 15.2 per cent currently, significantly lower than the 25.7 per cent a decade ago.
Rising tide