To facilitate the sale of the LIC stake, the government will need Parliament approval to amend the LIC Act.
Union Finance Minister Nirmala Sitharaman on Monday, made a big announcement regarding the upcoming LIC IPO in her Budget 2021 speech. Nirmala Sitharaman confirmed that legislative amendments required for LIC IPO would be brought in 2021-22. The government on Monday budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including 2 PSU banks and one insurance company, in the next fiscal year.
While announcing plans to sell stake in LIC as part of disinvestment plans for FY22, Finance Minister said that her government will complete divestment of BPCL, CONCOR and SCI in FY22. She said that her government will privatise two public sector banks (PSBs) and one general insurance company as well.
To facilitate the sale of the LIC stake, the government will need Parliament approval to amend the LIC Act.
Unveiling the PSE policy in Budget 2021-22, Finance Minister Nirmala Sitharaman said barring four strategic areas, public sector companies in other sectors will be divested. The policy would give a clear roadmap for disinvestment in strategic and non-strategic sectors.
Sitharaman said, "Strategic sale of IDBI Bank, BPCL, Shipping Corp, Container Corporation, Neelachal Ispat Nigam Ltd, among others, would be completed in 2021-22 fiscal year beginning April 1. Also legislative amendments required for LIC IPO would be brought in 2021-22." She added NITI Aayog has been asked to work on next list of central public sector companies for strategic disinvestment.
As part of its divestment drive, four CPSEs - Hindustan Aeronautics (HAL), SAIL, Bharat Dynamics and IRCTC have come out with offers for sale (OFSes) this financial year. They garnered Rs 12,907 crore to the exchequer. In addition, IPOs of IRFC and Mazagon Dock Shipbuilders together fetched Rs 1,984 crore.
Sitharaman said a revised mechanism for fast-tracking closure of loss making PSUs would be worked out and an incentive package would be developed to incentivise states to sell stake in state PSUs. To monetise lands owned by CPSEs, a special purpose vehicle (SPV) would be developed.
So far this fiscal, the government has garnered Rs 19,499 crore through minority stake sale in CPSEs and share buybacks.
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 "Big announcement on LIC IPO")
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