Chennai: Congress may oppose the proposal to list insurance behemoth Life Insurance Corporation of India if the Centre failed to convince it about the rationale behind the move, senior party leader P Chidambaram said on Monday.
The LIC is profitable despite fierce competition from very large insurance companies of the world with deep pockets and it has also increased its first premium share last year by about five per cent, he said.
Presenting the 2020-21 budget, Finance Minister Nirmala Sitharaman on Saturday proposed to sell a part of government stake in LIC through an initial public offer next fiscal.
Participating in a Question and Answer session after his lecture on Budget organised by the Southern India Chamber of Commerce and Industry in Chennai, Chidambaram, a former finance minister, said the LIC was doing well.
"They have to explain to us... why do you want to list LIC today. Is it because you think the management culture is bad? the work culture is bad? Convince us," he said answering a query.
He further said, "But if the reason which the government gives is we have to collect money and therefore we want to disinvest, we will oppose it. That is a bad reason. You tell us good reasons why LIC should be listed."
The government may probably list about five or 10 per cent and it was not going to change LIC's ownership, Chidambaram said.
Also, he said the if the government was able to convince the Congress party, "may be, we will be convinced. But at the moment we are sceptical."
On the budget proposal for abolition of Dividend Distribution Tax for companies, he said his personal view was that the "DDT is an efficient tax. There is no scope for evasion in DDT. Zero evasion... somehow it acquired a bad name."
Though it was introduced by him when he was the Finance Minister, his successors including Pranab Mukherjee and Arun Jaitley stuck to the DDT, he said claiming the foreign investors lobby in Mumbai went against it.
To a question on Air India disinvestment, the former minister said he had doubts about the government successfully privatising it.
"It is not easy to sell Air India. It has got too much baggage."
On state-run telecom major Bharat Sanchar Nigam Limited, he said though it has great assets like optical fibre, it has outlived its utility and it cannot compete in the present-day market.
The BSNL belonged to the age of monopoly and had a different work culture, Chidambaram said.
"I am not so worried about the privatisation of BSNL. I want to know how they are going to dispose of that asset. Are they going to dispose it off in a fair and transparent manner and get full value for the asset? It is a huge asset," he noted.