LIC’s Stake Sale

In its 2020 budget, the central government has proposed to divest (reportedly 10% of) its ownership in India’s insurance behemoth, the Life Insurance Corporation of India (LIC) through an initial public offering (IPO) to be floated in the next fiscal year. This, understandably, is in line with the government’s (belligerent) disinvestment and asset monetisation strategy, and as per media reports, the IPO is expected to amass about a third of the total disinvestment target of `2.1 trillion set by the government for the financial year 2021. Listing the LIC, however, is not the brainchild of the current government. While predecessor governments had toyed with the idea, they had refrained

from actual implementation. Notwithstanding the complexities of the corporation’s structure and its investment portfolios, such forbearance also lies in the very fact that being 100% under government ownership, the LIC could be a ruling government’s “milch cow” for funding and bailing out public sector enterprises in crises. Other than an official statement, how different is the current government’s rationale for LIC’s listing from such sentiments of its predecessors, in reality?