LIC-IDBI deal: Premium money of citizens can't be used to fill fiscal gaps

The fact that LIC has gross assets of more than Rs 27 trillion does not give the real picture of its financial health as it has to take care of corresponding liabilities too

A dangerous narrative being peddled by the Centre is that LIC has so much cash – it gets about Rs 2 trillion premium money from customers every year – that it is a mere drop in the ocean if it buys a 51 per cent stake (about Rs 130 billion) in IDBI Bank.

There is also talk of LIC rescuing Air India by taking a 24 per cent stake after the government’s failed attempt to invite bidders to acquire the ailing airline.

The notion that LIC has an unlimited war chest is totally fallacious because life insurance companies hold people’s premium money