It is a letter by E A S Sarma Former Secretary to Govt of India Visakhapatnam to Shri Pinarayi Vijayan, Chief Minister Kerala https://countercurrents.org/2022/03/welcome-kerala-legislative-assemblys-resolution-opposing-disinvestment-of-the-lic/
It is difficult to find a low-income household in the country today that is not covered by an LIC policy. The policyholders’ funds as on date exceed Rs 28,30,000 Crores. With the help of such a large amount at its disposal, the LIC has been able to fund several infrastructure and social sector projects in the different States. In other words, while the LIC has provided a long-term social security cover for millions of low-income households in each State, the Corporation has also simultaneously utilised the policy holders’ funds to finance socio-economic development of the States. The States have thus become an important stakeholder in the LIC in its present status of a 100% government-owned institution.
Without an elaborate discussion in the Parliament, keeping the States and both the policy holders and the employees of the LIC in the dark, the Centre had summarily decided to amend the LIC Act through the backdoor of the Finance Bill in 2021, to pave the way for disinvesting government’s equity to a handful of affluent, speculative stock market investors. This implies that the Centre has started dismantling the vast social security cover that the LIC has hitherto provided by relinquishing its own role as a public trustee and exposing the policyholders’ funds to the whims and fancies of the stock markets.