The divestment of Life Insurance Corporation (LIC) by the government will not cause any problems for the company's employees, chairman MR Kumar told NDTV on Friday. There will be a reaction by the staff but the company will talk to them, said the LIC chairman, assuring that the proposed stake sale will not lead to its privatisation of the insurer. In the Union Budget for 2020-21, the government proposed to divest a part of its stake in LIC in a move that could result in the partial listing of the country's largest insurance company, which led to protests by the staff who said the move is against national interest.
"This (the stake sale) is nothing to do with privatisation... Yes, there will be a reaction bit we will talk to staff and employees," said Mr Kumar.
LIC Chairman, Mr. M R Kumar, addresses the Media Conference at Trident, Mumbai, 7th February, 2020. Also seen on the dais the Managing Directors, Mr. T C Suseel Kumar, Mr. Vipin Anand, Mr. Mukesh Kumar Gupta and Mr. Raj Kumar. pic.twitter.com/TT0jUWhQGoLIC India Forever (@LICIndiaForever) February 7, 2020
"I had said in October that it is too early to go public, But what can I say now... I have been overruled perhaps," the LIC chairman said on a lighter note.
He also said that a decision on the valuation of the company is yet to be made. "Can't say anything on it as of now," he added.
"We are talking to government and will have series of discussions and will tell once a decision has been made," Mr Kumar said.
The LIC chairman's comments came after trade union All India LIC Employees Federation staged an hour-long walkout strike this week to protest against the government's move to sell its stake in the state-run insurer.
Meanwhile, the government has said that the listing of LIC may be done in the second half of next financial year and will help deepen the equity market.
The government currently owns a 100 per cent stake in LIC that was set up in 1956. LIC controls a majority share in the life insurance market in the country.
Paring its stake in the insurance giant will help the government meet its divestment target, which has been increased to Rs 2.1 lakh crore in financial year 2021 compared to Rs 1.05 lakh crore in the current fiscal year.
Although the government did not give a roadmap for listing LIC, it said that Rs 90,000 crore will be achieved via stake sales in state-owned banks and financial institutions.
Minister of State for Finance Anurag Thakur said the listing of LIC will help bring in greater transparency, public participation and also deepen the equity market.