Rahul Gandhi, the former chief of India’s main opposition party Congress, has slammed the Prime Minister Narendra Modi-led government for privatising government firms.
Gandhi, a vocal critic of Modi, said on Tuesday that the Bharatiya Janata Party (BJP) –led government is selling stakes in state-run firms bit by bit to compensate for the economic distress it has created. He cited the sale of India’s public sector insurer LIC as an example, saying it was a “shameless” act of the government.
Taking to Twitter on Tuesday, Gandhi said, “The Modi government is on a binge to sell the government companies. To compensate for the economic distress created by it, the government is selling national assets in small portions.”
He said of the Modi administration's plan to sell part of India's stake in the country’s largest insurer, Life Insurance Corporation (LIC), that it was “compromising the future of the people of the country," adding that the "sale of (LIC) is one of the shameless efforts of the government.”
Out of India's 24 life insurance companies, LIC is the largest, with a market share of 69% in fiscal 2020.
In the country’s annual budget, tabled by Finance Minister Nirmala Sitharaman in February this year, a 10 percent divestment of the government's stake was announced.
"Listing of companies on stock exchanges disciplines the company and provides access to financial markets and unlocks its value. It also gives an opportunity for retail investors to participate in the wealth so created. The Government now proposes to sell a part of its holding in LIC by way of Initial Public Offer (IPO)," Sitharaman said while reading out the proposal in the Indian Parliament.
Apart from the LIC, the government has also set the ball rolling for privatisation in other sectors like aviation and energy.
The process of privatising the state-run airline Air India has already started. The government is also planning to sell its entire 52 percent stake in the state-owned oil refiner Bharat Petroleum Corporation Limited (BPCL).
In the latest budget, India has set a target of $28.06 billion from the disinvestment of its stake in the government companies in the financial year 2020-21 (April 2020 – March 2021).