New Delhi: Claiming that the offloading of its stake by the Central government in Life Insurance Corporation (LIC) in the form of Initial Public Offering (IPO) is the "first steps towards privatisation" of the country's largest insurer, insurance employees' associations have called for a two-hour work strike on May 4 – on the day the said IPO is scheduled to open.
Nearly 80,000 class 3 and 4 LIC employees in branches across the country are expected to join the action, jointly called by the All India Insurance Employees' Association (AIIEA) and All India LIC Employees' Federation (AILICEF), NewsClick has learnt on Friday.
The LIC employees' bodies called the decision to go on a walkout strike to "register [employees'] protest against the IPO," as per the official statement issued by the groups. Both AIIEA and AILICEF collectively represent almost the entire work strength, except the field agents, at LIC.
"The IPO will undermine the very foundational objectives of the LIC. LIC has become an inseparable part of the economy and national development during the last sixty-five years of its glorious existence. It is difficult to find any sector of the economy where the footprints of this great institution are not found," the AIIEA had said in a statement earlier this week.
The association, which is among the largest in the country to represent insurance employees, added that the IPO of LIC will also be "antithetical to the interests of millions of its policyholders who are the real owners of the LIC."
While the decision to offload government stakes in LIC was announced by the Narendra Modi–led Central government much earlier this week, it was informed later that the issue size had been brought down from 5% to 3.5% due to adverse market conditions. Moreover, the pricing of the issues has also faced a cut.
As such, the state-owned insurer is now valued at Rs 6 lakh crore at the higher end of the price band – it was expected to be Rs 10 lakh crore earlier – with the IPO size being at Rs 21,000 crore. It has also disclosed its embedded value (EV) at about Rs 5.4 lakh crore for the first time. The embedded value is the sum of the current value of future profits and adjusted net asset value.
The employees' bodies expressed concern at the bringing down of the valuation of LIC, which according to them, amounts to a "serious breach of trust" with its policyholders and the citizens of the country.
In a statement issued on Wednesday, AIIEA alleged that the scaling down in valuation of LIC also makes the "desperation" of the Centre to sell shares of the state-owned insurer "all the more evident."
Preparations are underway to ensure that the limited strike action by insurance employees is observed in LIC branches across the country, AK Bhatnagar, vice-president, AIIEA, told NewsClick on Friday.
"At each branch level, association members are participating in campaign programmes daily. They are spreading awareness on this matter to not just insurance employees, but also to the general public," he said, though contending that it is "difficult to completely challenge" the Centre's narrative, given the brouhaha in the media that has currently surrounded the LIC IPO.
Bhatnagar further explained on Friday that the purpose of May 4's work strike is to ensure that a large number of employees registers protest against LIC IPO.
"We will continue our struggle to save LIC from being eventually privatised even in the future," he said.
On Thursday, the Centre of Indian Trade Unions (CITU) also flayed the Centre for going ahead with the "anti-national" move of opening the LIC IPO.
"Notwithstanding its pseudo-nationalistic postures, the BJP government has succumbed to the demands of the global and domestic so-called 'investors' who have been lobbying since long to swallow this largest public financial institution," CITU said.
Meanwhile, the Central government has also received flak from the opposition parties for taking the first step in what they termed as destroying the public character of LIC, which holds two-thirds of the insurance market.
In a statement, both Communist Party of India (Marxist) (CPI-M) and CPI condemned the Central government, while Congress leader Jairam Ramesh took to Twitter to question the move, according to a report by The Hindu.