On Saturday, Finance Minister Nirmala Sitharaman said insurance behemoth Life Insurance Corporation (LIC) will be listed as part of the government disinvestment initiative. She further said that the listing brings in more financial discipline among the entities.
"Government will list LIC on the stock exchanges", she said in her Budget speech. The government proposes to sell a part of its holding in LIC through initial public offer, she said while unveiling Budget 2020-21. Currently, the government owns the entire 100 per cent stake in Life Insurance Corporation of India (LIC).
This could be the country's biggest initial public offering in recent times, the government will list Life Insurance Corp of India in the next financial year starting April. The proposal to list LIC is something which will be a big-ticket disinvestment proposal to push revenues of the government.
India's largest life insurer LIC's surplus for 2018-19 increased 9.9 per cent to Rs 532.14 billion. This was the first time that LIC's surplus crossed the 500-billion-rupee mark.
In her Budget proposal, she proposed that will the government will sell its stake in IDBI Bank to private investors and also amend Banking Regulation Act to strengthen co-op banks
The finance minister also said that the deposit insurance coverage against bank failure will be increased to Rs 5 lakh from Rs 1 lakh. "Accordingly, it is proposed to sell the government's balance holding in IDBI Bank to private retail and institutional investors through the stock exchanges," Sitharaman said during the presentation of Union Budget 2020-21.
"There is a need to take further steps to bring transparency and greater professionalism in public sector banks. The government will take such steps in the days ahead," she added. Earlier while speaking about Deposit Insurance and Credit Guarantee Corporation, she had said that they have been "permitted to increase deposit insurance coverage to Rs 5 lakh per depositor from Rs 1 lakh."
This is the second budget for Sitharaman, who became the second woman finance minister after Indira Gandhi to do so in the history of independent India. The Finance Minister on Friday tabled in Parliament the pre-Budget Economic Survey for 2019-20, which projected the state of the economy and outlined its challenges. The survey was released by Chief Economic Adviser Krishnamurthy Subramanian.
(Inputs from Agencies)
