September 12, 2021

Cutting the Roots of the Banyan Tree

P G Dileep

18,40,00,00,000 – An ordinary man cannot even read this figure. Foreigners will read this as 1.84 trillion and Indians will say Rs 1.84 lakhs crores.  We will be shocked to know that this is the record premium income of LIC last year.  Premium means the amount collected from the policy holders.  We should understand that this record collection is at a time when all the insurance companies in the world are facing a big blow due to Covid-19.  For this very reason, LIC is number three among the strong international insurance brands.  During this period 8 per cent reduction was recorded in the most profitable hundred insurance companies in the world.  Even the premier insurance company in the world “Ping An” in China showed a reduction of 26 per cent.  The main reason for mentioning all these is that even in this pandemic season all out efforts are going on behind the scene to kill LIC, which is India’s pride and a global model. The central government is fully utilising this pandemic period as an opportunity.

The aim of the government is to sell the first share of LIC at the earliest.  Once the first share is sold, the rest of the shares can be sold just by a decision of the cabinet.  Side by side, steps are also being taken to avoid big protests from public and LIC officials. It is now nine months since the attempt to destroy LIC has started.  As a result the most valuable company in the public sector has been listed as a company with an asset of Rs 25 lakhs crores whereas the LIC has Rs 38 lakhs crores of assets and Rs 33 lakhs crores of life fund.  SEBI has been influenced to take a loose stand before entering into the share market.  Banks have been advised to take charge of selling of shares, as the size of the share of LIC is so big.

The General Insurance Business (Nationalisation) Amendment Bill, 2021, which is such an important bill, was passed in the parliament without any discussion. The bill presented in the parliament was supposed to be normally referred to the select committee and brought back to the parliament after seeking the opinion from all sections of people and then thoroughly discussed in the parliament before passing.  There is a hidden agenda behind passing this bill without following any of the procedures.  It is at a time when the Indian economy is facing serious trials that this golden goose is being sold at just the cost of simple meat. Government is afraid of the reactions of the 40 crores of policy holders who love LIC, when they hear the news of selling LIC.  We should remember that this sudden move to sell the shares of LIC is when the country is increasingly facing economic inequality and anarchy.

What makes LIC different from other financial institutions is its long term investment and loan facility for governments on long term basis.  Not only central and state governments but financial help is availed by road development, water authority, electricity authority etc., and even by the share market.

A close observation will reveal that the investors in the LIC share market are all premier companies in their sector.  LIC has invested in 21 Indian banks. Whether it is public sector or private sector or banks, there are hardly any organisations which do not have an investment from the LIC. That is why it is a fact that the privatisation of LIC will break the complete business sector. The branches of this banyan tree are being cut – the roots being destroyed.  It is not easy to convince the central government authorities about protecting this gold mine.  You can wake up those who are sleeping, but not who are pretending to be sleeping.