LIC Employees Protest Govt’s 2.5% Equity Disinvestment

Life Insurance Corporation of India (LIC) employees in Jammu staged a significant protest on August 5th, opposing the Indian Government’s decision to further disinvest 2.5% equity in the public sector insurer.

This action targets the proposed Offer for Sale (OFS), which follows a previous equity dilution in May 2022.

Understanding the Disinvestment Proposal

The government’s plan involves an Offer for Sale, a mechanism allowing promoters to sell existing shares to reduce their stake in a company.

Comrade Pawan Gupta, Divisional Secretary of the Northern Zone Insurance Employees’ Association, condemned the move, highlighting its potential scope.

• The current offer includes a base sale of 2.5% of LIC’s paid-up equity.
• An additional 4% greenshoe option could increase the total disinvestment from this specific offer to 6.5%.
• This follows an earlier 3.5% equity dilution during LIC’s Initial Public Offering (IPO) in May 2022.

Employee Concerns and Broader Implications

Organized under the Northern Zone Insurance Employees’ Association Srinagar Division, which is affiliated with the All India Insurance Employees’ Association (AIIEA), the protest voiced strong opposition to the government’s policy direction.

Employees criticized the continuous shift away from strengthening the public sector, viewing it as a move to privatize national assets.

They argued that LIC fundamentally belongs to the people of India, not solely to the stock market, and called for an immediate withdrawal of the proposed OFS.

• The government has realized over Rs 21,000 crore in the current financial year alone.
• This amount was generated by offloading shares in seven public sector undertakings.
• Similar demonstrations were led in other locations, including Kathua, Samba, R S Pura, Udhampur, Doda, Poonch, and Rajouri.

The employees urged the government to abandon its policy of piecemeal privatization of public assets, emphasizing the crucial need to preserve public ownership.