New Delhi: The Bharatiya Mazdoor Sangh (BMS), an RSS affiliate, has termed the budget proposal on disinvestment of the LIC and IDBI as "bad economics".
"It indicates the government is helplessly continuing to depend on sale of national wealth for revenue generation," the BMS said.
Stating that a national discourse is required for finding an alternative revenue generation method, the BMS said, otherwise all the public sector undertakings and other assets would be sold at throwaway prices.
Finance Minister Nirmala Sitharaman said on Saturday the government would reduce stake in the life insurer LIC through the initial public offering (IPO).
"The government will list LIC on the stock exchanges," she said in her budget speech.
To be listed in the FY21, starting April, it could easily emerge as the country's top listed company in terms of market valuation, overtaking even big names like Reliance Industries Ltd and Tata Consultancy Services.
“We are allowing retail investors to participate in wealth creation,” Sitharaman had said.
However, the listing could be a complicated affair given LIC's huge investments in real estate, art and equity market, said an official. The valuation process could be time-consuming, the official added.
The government had listed the shares of General Insurance Corporation and New India Assurance through IPOs two years ago. It will have to amend the LIC Act first before taking the Corporation public.
On November 20 last year, the Cabinet Committee on Economic Affairs approved stake sale in five public sector entities, namely BPCL, Container Corporation, North Eastern Electric Power Corporation, Shipping Corporation of India and Tehri Hydro Development Corporation.
In FY20, the disinvestment accrued only about Rs 18,000 crore to the government.
(With inputs from IANS)
