While speaking exclusively to Republic Media Network's Editor-in-Chief Arnab Goswami, Finance Minister Nirmala Sitharaman spoke about the Centre's decision to sell a stake in the Life Insurance Corporation (LIC) - the government's most prominent investment and holding vehicle.
When asked on why the Government was selling a stake in a company that had a net profit of Rs 26,000 cr in 2018 and whether the deductions and disinvestment would affect the performance of LIC, Nirmala Sitharaman said,
"I am not sure that is right. It's (the opposition to the announcement on LIC) a knee-jerk response. Why should we assume that a taxpayer should be told to invest in this or that? Is he not an adult? Taking care of his income, family, managing his affairs. Is he not rational enough to decide where he wants to put his money? He can decide if he wants to go to LIC, or spend all the money or go buy a vehicle, it's upto him."
Currently, the government owns a 100% stake in LIC, established in 1956. For the fiscal year 2020-21, the Centre has set a disinvestment target of Rs. 2.1 lakh crore. The government has decided to sell a part of its holding in LIC through an initial public offer.
"To conclude that because this exemption is being removed, people going into LIC will reduce, therefore LIC's share, I mean this is such a knee jerk response. Do you think Indians need that kind of hoarding any longer. Now they can also choose to go to the stock market, they can buy shares, they can become mutual fund subscribers. They can do a lot more newer things."
Sitharaman also spoke on the government's efforts toward disinvestments, especially the long-running Air India saga. During her speech at the Union Budget session in the Parliament, she had stated that the Centre has now set March 17 as the deadline for submitting Expression of Interest (EoI) by bidders wanting to buy Air India according to a preliminary information memorandum issued earlier this week. Speaking on this she said,
"The disinvestment was announced in July, We only have 7 months that have gone by and the extent of work the department of disinvestment has done, was how we were able to come up with the expression of interest for Air India. I did not have the advantage of a full year post the budget in July. Now when it happens it goes into the next fiscal year."