LIC disinvestment: Right and wrong

The central government is disinvesting 5 per cent of the shares of the Life Insurance Corporation of India (LIC)

The Government of India (GoI) is disinvesting 5 per cent of the shares of the Life Insurance Corporation of India (LIC). The GoI will retain control of the company. It is likely that the government will sell more shares over time. It appears that the sale proceeds will be used for projects like highways. Even so, is all this sound economics?

Institutions like the LIC are possibly dear to many people. However, the economic case is weak. It is often said that it is not the business of the government to be in business. This implies that the GoI should