New Delhi, March 18: Employees of the Life Insurance Corporation (LIC) are observing a one-day strike against the Central government's proposals to divest stake through an initial public offering (IPO). The LIC employees are protesting against the Centre's proposed disinvestment plan. They have also called the nationwide strike, against the government's proposal to privatise one general insurer and enhancing the FDI limit in the insurance industry. Union Budget 2021: Govt Proposes to Increase FDI Cap in Insurance Sector to 74%.
Notably, the government is planning to enhance the FDI limit in the insurance sector from 49 percent to 74 percent. The LIC has around 1,14,000 employees. It has Close to 290 policyholders. Finance Minister Nirmala Sitharaman in her Budget 2021 speech, proposed to amend the Insurance Act 1938 to "increase the permissible FDI limit from 49 per cent to 74 per cent in insurance companies and allow foreign ownership and control with safeguards".
At present, LIC is completely owned by the government of India. Established in 1956, LIC is the country's largest insurance company. Earlier this week, The government assured the Lok Sabha that it does not intend to privatise LIC. The government clarified that it had planned an IPO to raise the market share of the insurance company and to bring more investment. The IPO is likely to be issued in the second half.
The strike by the LIC employees came two days after the national-de bandh called by the United Forum of Bank Unions (UFBU) against the privatisation of Public Sector Banks and retrograde banking reforms. The UFBU is an umbrella body of nine bank unions. Around 10 lakh bank employees and officers of the banks will participate in the strike.