Skip to main content

India- Is the government misusing LIC?

The government is battling crisis on several fronts, a sputtering economy, soaring crude oil prices and inflation amongst others. One of the biggest concerns is the spiraling fiscal deficit. The central government has found it tough to rein in the deficit given the high spending on fuel subsidies and social welfare programmes, coupled with heavy borrowing and low collection through taxes. Though the government believed that its disinvestment programme would help tide over the cash crunch to an extent, the plan has not panned out as per expectations.
In order to get the fiscal situation under control, the government is using Life Insurance Corporation (LIC) and other public sector undertakings (PSUs) to fill its cash kitty. LIC of India has come to the Government's rescue repeatedly in the recent past. It bought shares in state-owned banks in 2009. In 2010, it bought the government's stake in a mining firm. This time, it is injecting a billion dollars into some state banks. It has also bought out part of the government's stake in an oil firm. It held 4% stake in 34 PSUs in December 2008. This increased to 5.6% stake in 42 PSUs at the end of 2011.
LIC's role was highlighted in the recent ONGC episode. The insurance company invested more than Rs 150 bn in ONGC this quarter, which includes the shares divested by the Government recently. It is also planning to infuse Rs 78 bn into public sector banks in the coming months. The insurance giant is however not showing a similar preference for private sector companies. Its stake in private companies has more or less remained the same.
In the middle of all the drama, perhaps the biggest losers from the government's arm-twisting of LIC are the policyholders of LIC's insurance contract. They might have lost 25% of the value of their investments so far in government-owned businesses

From http://in.finance.yahoo.com/news/government-misusing-lic-030000406.html

Comments

Post a Comment

Popular posts from this blog

Communist party launches 'China Operating System' to oust iOS and Android

hina officials have launched a national operating system in an attempt to take back control of the country’s computer market from American companies such as Google and Apple. The software has been in development for more than a year, but has been released at a crucial time with revelations about US-led surveillance sparking fears over the integrity of American-designed software. Known simply as the China Operating System, or COS, the software can run on PCs, tablets and smartphones and has been based on the open-source Linux operating system. Chinese media say that the OS has been created “entirely independently” in order to provide better localization for a range of features – from Chinese-language keyboards, to integration with the country’s banks. At the launch of the event, one of the developers involved with the project reportedly criticized Western software , saying that Apple’s iOS was too closed, that Google’s Android OS suffered from fragmentation (ie, too many versi
Post a Comment
Read more

Best IELTS and English language training institutions in Hyderabad

IELTS stands for International English Language Testing System. As the name implies it is basically an English test for testing the proficiency of the language in an individual.  Training for IELTS can be taken to pass the IELTS exam or to develop good english language skills. I am giving the training institute addresses for Hyderabad. The test system is jointly managed by the British Council,IDP education ltd and University of Cambridge ESOL Examinations and more than 1 million candidates are taking the exam all over the world. The test has two versions : 1. Academic 2. General training Academic  version is for people who plan to continue their higher education by enrolling in universities in countries like US,UK,Australia,Canada,New Zealand etc.The academic institutions in these countries consider the IELTS score as a criteria for the admission process. General training is mostly for immigration purposes in countries like Australia,New Zealand,Canada etc. It may also be u
9 comments
Read more

How to avoid injurious sitting posture at work? Take care of Ergonomics

The impact of poor consideration of these, as well as other, ergonomic elements can be very hazardous to our  well-being. Some of the effects include increase chances of suffering from carpel tunnel syndrome, decreased eye sight, cramps in our joints, strain from overworking certain muscles and joints,  and decreased blood-flow circulation. Work productivity also decreases when we are in environments that are not designed for proper ergonomics. One other important thing to consider is the lighting levels in the space. I actually did not even think of this as an ergonomic design issue, but it truly is.  Our eye muscles are the most used muscles in our entire body.  We use our eyes in every situation throughout our entire day.  Poor considerations for lighting causes very negative short and long-term effects.  It is recommended that we use mixed levels of lighting in our environments. This allows for multiple options for each user depending on his or her preferences and physical nee
Post a Comment
Read more