Amit Mitra asks FM to reconsider LIC and United India Insurance Company's privatisation

The Bengal finance minister, in a letter, detailed the scale of people and sectors, including the government itself, that would be affected by the move

Amit Mitra:File picture

Anita Joshua   |   TT  |   02.08.21 : Bengal finance minister Amit Mitra is learnt to have written to Union finance minister Nirmala Sitharaman urging a rethink on the government’s plans to privatise public-sector insurance companies including the Life Insurance Corporation and the United India Insurance Company.

In a letter sent on Saturday evening, Mitra detailed the scale of people and sectors, including the government itself, that would be affected by the privatisation of these two insurance companies.

He referred to the Rs 11,396 crore invested by United India in government securities, government guaranteed bonds and short-term treasury bills and said privatising the company would “itself raise hydra-headed financial problems while undermining the confidence of the common retail insurers of the poorer sections of society”.

Mitra said the same held true for the LIC, underscoring that its volume of investment in the Indian economy stood at a “staggering Rs 36.76 lakh crore (FY 2020-2021), out of which Rs 23.75 lakh crore is in government securities”.

Besides, the LIC’s loans to the government, government bodies and corporate groups add up to more than Rs 21,000 crore.

“Privatising LIC would lead to opening a Pandora’s box, throwing into insecurity 30 crore (300 million) policyholders. Also, such privatisation of LIC would put into jeopardy the livelihoods of 12 to 15 lakh insurance agents. This will also throw into uncertainty the lives of 1.14 lakh employees.”

Mitra wrote to Sitharaman following reports that the cabinet had approved an initial offering of the LIC as part of the agenda of disinvestment.

Also, there are reports that the cabinet has approved amendments to insurance laws to facilitate the privatisation of a state-owned general insurance company.

The proposed privatisation of these two companies is likely to be added to the mix of issues that the Opposition is trying to raise in Parliament this session.

Still, pinning the government down on the alleged Pegasus-enabled snooping remains the topmost agenda of the Opposition, which is demanding a structured discussion in both Houses in the presence of the Prime Minister or the home minister.