Quite some time the ripple effect slogan was subdued. But as the Supreme Court hearing is fast approaching the slogan is getting orchestrated by the new babus in the finance ministry who off the cuff point out the consequences that would follow in the banking industry if the pension upgradation is conceded to the LIC pensioners.
Whatever may be the consequences it is for the IBA to sort it out as it is their domestic problem and they cannot come in the way of LIC pensioners getting their lawful and legitimate demands which had the LIC Board’s blessing and later on endorsed by several court rulings.
- It is futile to compare LIC a pioneer financial institution to the PSU Banks as both stand on different pedestals. While several crores of bank money got ploughed into non-performing assets (The ratio of non performing assets to total assets as on SEPTEMBER 2014 is 4.5 % ) the result of lack of fiscal discipline and indiscriminate lending. On the contrary LIC has an enviable track record of prudent financial management which is translated in the expense ratio which always remained below 15 % of the renewal premium income. Any comparison between these two un equals is like comparing USAIN BOLT, the fastest human being on the planet to a sprinter who could not clock even 10 seconds in the 100 meters dash.
No wonder LIC earned the sobriquet ‘Navaratna’ among the PSUs. The former Finance Minister called LIC the ‘Kamadenu’ as it has been regularly contributing without a break to the national exchequer the profit which remained after giving 95 % of the profit to the policy holders as bonus. In the financial year 2014 LIC has given to the Government 32685.21 crores, not a small amount and no wonder it has become the milch cow of the government and would continue to be so.
LIC is a forerunner in nation building activities as it has invested 1069769 crores of which 871497 crores was invested in Central government and State Government securities and 198272 crores was invested in housing, electricity, water supply, severage, road, railways,telecom etc. The entire work force of LIC past and present worked with their sweat to build this edifice which stands as the tallest among the PSUs.Should not they in recognition of this deserve a better deal which has been spelt out partly in LIC Board resolution and to bring in now the so called ‘ripple effect’ is devoid of any reasoning. The talk about the ripple effect can happen outside the court but will not get any cognizance when the judgment is delivered.