Justifying LIC IPO for funds from market ridiculous: AIEEE leader

Visakhapatnam: Stating that the BJP-led NDA Government is keen to hand over Life Insurance Corporation of India (LIC) to the private sector on a golden platter, a senior leader of All India Insurance Employees' Association (AIIEA) K Venugopal said there is no justification to go for LIC IPO.

He said the LIC was created through an Act of Parliament. It was given the task of raising resources for faster industrialisation of the country by collecting small savings in the form of premiums while giving utmost security to the policyholders. The LIC has been successful in meeting these objectives. The disinvestment of LIC is the first step towards privatisation, he said.

Venugopal, who had served as the general secretary of AIIEA for 10 years, told Bizz Buzz that LIC IPO violates the very objectives of its creation. The government has taken up a position that "listing of companies on stock exchanges disciplines a company and provides access to financial markets and unlocks its value. It also gives opportunities for retail investors to participate in the wealth created." The arguments advanced to list LIC in the stock market and float its IPO are hollow, he pointed out.

He said LIC is a transparent and efficient board-managed institution. It comes out with public disclosures every quarter with accountability. It submits reports of its functioning every month to the regulator Insurance Regulation Development Authority of India. It places its accounts in the Parliament for scrutiny. If this is not transparent functioning, what else, he asked. Venugopal said "the argument that listing will help LIC access funds from the market is laughable. LIC is the largest investor in the Indian economy. LIC generates investible funds to the tune of Rs 3.5 to Rs 4 lakh crore annually and thus, there is no necessity for LIC to access the market for funds."