LIC employees to go on one-day strike on the day of IPO opening

The proposal is against foundational objective of the corporation, says AIIEA general secretary

All the employees of Life Insurance Corporation (LIC), across India will go on a one-day strike the day the initial public offering (IPO) of the corporation opens up in the market, said Srikanta Mishra, general secretary, All India Insurance Employees Association (AIIEA). Speaking to The Hindu, he said that the very proposal of IPO for LIC was against the foundational objective of the corporation. The structure of LIC is unique, as the claimants of the profit are the policyholders, as 95% of it is distributed among them in the form of bonus and not the government, he saidHe pointed out that policyholders are the real owners, as the government’s share was only ₹5 crore in the form of equity, when it was incepted on September 1, 1956. But since then it has grown on its own and today its asset base is over ₹38 lakh crore, said Mr. Mishra.In 2011, when the Union Government had decided to increase its equity from ₹5 crore to ₹100 crore, it was internally generated and there was no contribution from the government.He also pointed out that in 2020, when the government decided to increase the equity of the corporation to ₹25,000 crore through an IPO, which was vehemently opposed, the corporation converted its ₹6,300 crore dividend payable to the government as capital.Technically the government may own the corporation, but in reality it is the policyholders who are the contributors, he said.Ridiculing the idea of the government that the IPO was necessary for transparency, accountability and generation of resources, he said, “Every quarter we submit a public disclosure and every year we end up with a surplus of ₹4.5 to ₹5 lakh crore.”