The government plans to announce the sale of a 10 per cent to 15 per cent stake in the state-run Life Insurance Corporation, the country’s biggest insurer, in next week’s budget, as part of a privatisation push to improve public finances, two government sources said. Finance Minister Nirmala Sitharaman’s plans to divest government control of large companies such as Air India and Bharat Petroleum Corporation failed to make much headway in the current fiscal year because of the pandemic. Now, the government is renewing its drive to sell stakes as it tries to shore up revenues following the deepest economic contraction in decades.
One of the sources said the government will enact changes to a parliament law governing LIC, which has assets under management amounting to over $400 billion. “To facilitate the sale of government stake in the LIC, the government will get a parliament approval to amend the LIC Act,” the first source said.
The government had announced plans to sell its stake in LIC last year. That got delayed by legal and administrative hurdles, the official said.
Ms Sitharam will present the 2021/2022 budget on Monday.
The government is also planning stake sales in IDBI Bank, Central Bank of India and Punjab & Sind Bank, a second source said.
Together, the plan is to raise ₹ 2.5 trillion-Rs 3 trillion ($34 billion to $41 billion) in the next financial year, officials said, partly to set off the shortfall in proceeds this year.