The Centre is likely to announce the sale of a 10% to 15% stake in state-run Life Insurance Corp, the country's biggest insurer, in the upcoming Union Budget, as part of a privatisation push to improve public finances, news agency Reuters reported citing two government sources.
Finance Minister Nirmala Sitharaman's plans to divest government control of large companies such as Air India and Bharat Petroleum Corp Ltd failed to make much headway in the current fiscal year because of the pandemic. Following which the government is now renewing its drive to sell stakes as it tries to shore up revenues following the deepest economic contraction in decades.
One of the sources told Reuters that the government will enact changes to a 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. However, that got delayed by legal and administrative hurdles.
Nirmala Sitharam will present the FY 2021-22 Union Budget on February 1 (Monday). Meanwhile, the government also plans sales in stakes in IDBI Bank, Central Bank of India and Punjab & Sind Bank, a second source told Reuters.