UNLOCKING LIC'S VALUE

THERE IS MUCH TO GAIN FROM BRINGING LIC TO MARKET VIA AN IPO, AND GETTING A HOLD ON THE FISCAL DEFICIT NOT THE LEAST TEMPTING OUTCOME, BUT THERE ARE HURDLES TO CROSS

- SITANSHU SWAIN

Its acronym, LIC, and its logo have been iconic symbols of financial security for Indians born before the new millennium. Even now, 290 million—or one in five—Indians are insured by the government-owned Life Insurance Corporation. It still controls 66 per cent of the country’s life insurance market even though private insurers, allowed into the fray in 1999, have now been around for over two decades. LIC is a financial behemoth like no other in the country, overshadowing even the State Bank of India (SBI). It has 4,955 offices across the country, many of them occupying prime real estate. It directly employs 108,000 people, besides 1.3 million agents across the country, and has assets under management of Rs 36 lakh crore, making it a megacorp three times the size of Reliance Industries, India’s largest private sector company.

For years, successive Indian governments have treated LIC as family silver—a prized possession they considered sinful to part with. The corporation has also shored up government finances on countless occasions, being the biggest buyer and investor of government securities, totaling Rs 17 lakh crore as of March 31, 2020, way higher than SBI’s Rs 10.47 lakh crore.