Modi govt eroding financial viability of LIC
By N Sundaramurthy
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 the big-bang reform. 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 nationalization.
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 the nation builder. It is the 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 recession and global financial melt-down, India could withstand upheavals, and for that credit largely goes 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, government had invested a mere Rs.5 crore as working capital. According to last reported valuation, LIC’s surplus is Rs.48,436 crore, for financial year 2018. LIC paid to the government of India a dividend of Rs.2,430 crore 19 lakh 58 thousand 193 for the FY-2018, on it’s paltry initial investment of Rs.5 crore. It has assets worth Rs.31.11 lakh crore. It has spent Rs.3,76,097 crore as on March 2018 for infrastructure Development of the nation.
It has bailed out IDBI Bank, ONGC, many financial institutions when they were facing severe crisis. LIC’s gross equity investment was Rs.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 life-line 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 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 credentials of NITI Aayog. BSNL is fast slipping into bankruptcy. The telecom requirements of Indian Railways is handed over to Jio. 25 Airports in the country are on the anvil for privatization. Do we require more examples? So, it is now the turn of LIC. The ruling party has brute majority in the Parliament. It thinks, it is time to go for the big-bang.
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, the autonomy 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 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 attack on LIC, there is 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, is 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 can not be allowed to be looted by the corporates. Like they have looted and defrauded the public sector banks. This has to be fought unitedly. (IPA Service)