Modi government’s plan to list LIC on stock exchange amounts to selling the family silver to pay the butler
Listing the LIC on the stock exchange will eventually lead to privatisation of a glorious institution that has often bailed out the nation in times of financial instability
The Narendra Modi-led government has decided to list LIC on the stock exchange. The media appears to be excited that LIC, the country’s largest financial institution, will become a potential candidate for public listing. It is termed as a big bang reform. But what is the big bang? In simple terms, it means – disinvest, weaken and ultimately privatise LIC.
Flattening LIC is the big bang. Where will it lead to? LIC is the largest financial institution in India. This is accepted even by the votaries of free market economy. What is also a fact is, LIC is the largest and the best life insurance company in the world by all standards. It took the acumen of the architect of modern India Pandit Jawaharlal Nehru and the sagacity of Chinthamani Rao Deshmukh (Nehru’s Finance Minister) and more than half a century of meticulous work for the LIC to reach the height of glory it has. LIC has more than hundred percent fulfilled the objectives of nationalisation.
What is glittering is the trust of the people in LIC. It is accepted as the best brand in India. In the process, LIC has emerged as a nation builder. It is a living example of India’s economic self-reliance. Now, the Union government is trying to sell such a prestigious and resourceful institution to private capital. That is exactly what it means to say by big bang. This big bang will contain the pathogen to destroy India’s economic sovereignty.
Even during recessions and global financial melt downs, India could withstand upheavals, and for that the credit goes largely to LIC. Former finance ministers P Chidambaram and Pranab Mukherjee have acknowledged LIC’s role in steadying India’s economy in glowing terms. The present set of rulers have very poor knowledge of history. It is another matter that they know little of politics and economics, as well.
When listed in the stock exchange, LIC will be the country’s top listed company in terms of market valuation. Way back in 1956, when LIC made a beginning, the government had invested a mere ₹5 crores as working capital. According to last reported valuation, LIC’s surplus is ₹48,436 crores for the financial year 2018.
LIC paid to the Government of India a dividend of around ₹2,430 crores for the FY-2018, on its paltry initial investment of Rs 5 crore. It has assets worth ₹31.11 lakh crore. It has spent ₹3,76,097 crore as on March 2018 for infrastructure development of the nation.
It has bailed out IDBI Bank, ONGC, and many financial institutions when they were facing a severe crisis. LIC’s gross equity investment was ₹68,621 crore in 2018-19. In spite of cutthroat competition for business, LIC has remained the overwhelming market leader. It has rescued many corporate companies as well. Transport is the lifeline of the nation. LIC has kept the lifeline moving. LIC has financed the government’s five-year plans.
After Narendra Modi assumed power as Prime Minister of India in 2014, Planning Commission was abolished. In its place sprouted NITI Aayog. What is the moral of the NITI Ayog? It is to privatise the public sector, no holds barred! Government has no business to be in business. NITI Ayog recommended the sale of India’s prestige, Air India. Anil Ambani’s Reliance Defence Ltd. was inducted as the offset partner of Dassault Aviation of France in Rafale Fighter Planes deal, rejecting HAL.
By now, people know the credential of NITI Aayog. BSNL is fast slipping into bankruptcy. The telecom requirements of Indian Railways are handed over to Jio. 25 Airports in the country are on the anvil of privatization. Do we require more examples? So, it is now the turn of LIC. The ruling party has a brute majority in the Parliament. It thinks, it is time to go for the big bang.
This ‘attack’ on the LIC and its timing is not an isolated activity. It is part of a grandiose plan, a blueprint. The autonomy of RBI, India’s biggest financial regulator, and that of other major market regulators like SEBI and IRDAI are being diluted. PSBs are under attack too. RTI Act is being amended to make it toothless. Right to free speech, right to dissent will be curbed. You have the Unlawful Activities Prevention Act (UAPA) Amendment Bill passed in the Parliament where-in a dissenter’s property can be attached. A critic can be labelled an ‘urban Naxal’, a ‘terrorist’ and handed punishment. She can be called ‘anti-national’.
The country is being led in a dangerous direction. The country’s Constitution and the Judiciary are under grave threat. The paramount question is, how to stem the tide? What is the political content of the working-class struggle? A political affront has to be dealt with politically.
The Central trade unions have been organizing protest strikes. The Central government has pushed through labour law amendments, to convert 44 labour laws into just four labour codes. The Wage Code is already passed in the Lok Sabha. The amendments are done in a sinister manner, as part of the Budget presentation, which move can be termed as unconstitutional. Government has plans to privatise about 45 PSUs. So, we see a rising tide of protest actions.
Coming to the specifics of the attack on LIC, there is a need for a sustained militant political struggle, to oppose and stop LIC’s privatization. We love India, it is our motherland. The wealth of India belongs to the people of India, not to the profit-hungry domestic and international capitalists. A much broader unity of LIC trade unions is the need of the hour. This was the message of late Gurudas Dasgupta delivered at the meeting of All India LIC Employees Federation held at Kolkata in January 2018.
One-upmanship and partisan politics of certain forces are like slow poison which harm the vitals of our collective movement. All India LIC Employees Federation is committed to militant struggles within and outside LIC shoulder to shoulder with the working class. No movement can advance in isolation.
LIC cannot be allowed to be looted by the corporates. Like they have looted and defrauded the public sector banks. This has to be fought unitedly.