Government allows 20% of LIC to be owned by foreign capital!


Report by Kamgar Ekta Committee (KEC) correspondent


While insurance and other workers are opposing the proposed sale of shares of LIC through IPO, the central government has decided to allow 20% of shares of LIC to be owned by foreign capital.

Following the Cabinet approval, the Department for Promotion of Industry and Internal Trade (DPIIT) on March 14 had amended the Foreign Direct Investment (FDI) policy to facilitate overseas investment in LIC ahead of the mega public offer. Now the government has amended rules of the Foreign Exchange Management Act (FEMA), which will allow up to 20 per cent FDI in LIC through the automatic route.

By allowing up to 20% foreign capital, the government has indicated that the government will keep selling shares of LIC and the hold of finance capital on LIC will keep increasing.

It is well known that both Indian and foreign finance capital are only interested in maximising the value of shares they have invested in. LIC will be forced to keep aside its social and national objectives to maximise the value of its shares. Crores of policy holders will be the biggest losers.



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