Hard pressed to meet the Rs 30,000-crore disinvestment target, the finance ministry has permitted the state-owned Life Insurance Corporation (LIC) to invest up to 30% in a company as against the earlier ceiling of 10%.
The notification relaxing investment norms for LIC has been issued. The new norms will enable the cash-rich LIC, which invests around Rs 50,000-60,000 crore in equity annually, to pick up higher stakes in state-owned companies during the disinvestment process.
Insurance regulator IRDA, however, was against LIC picking up more than 10% equity in a company. It wanted LIC to stick to the norms applicable for private insurers.
The government’s decision is apparently aimed at pushing through the disinvestment process which had so far remained a non-starter.
The government in the budget for 2012-13 had proposed to raise Rs 30,000 crore from stake sale in PSUs.
Finance minister P Chidambaram, in a recent interview, had expressed confidence that government would be as near the fiscal deficit target as possible.
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