Lic To Sanction Rs 200 Crore To Kerala

The Life Insurance Corporation of India (LIC) will sanction an additional Rs 200 crore to the Kerala government. This, said senior LIC officials, is in accordance to the allocation decided by the Planning Commission under the five-year plan.

Senior officials said the funding had been withheld as LIC was examining whether or not the state government had paid up its past dues. "We are reconciling the small adjustments to be made for past dues. We do not release additional funds until past dues have been paid," said a senior executive.

"Our funds belong to policyholders. We have to be certain that when we lend out, we are not jeopardising the policyholder's money," said the LIC executive. On the advice of the Planning Commission, LIC allocates funds to various state governments. However, these are backed by state government guarantees.

 

Till date, LIC has extending Rs 259.65 crore (estimated) in 200-01 to Kerala. The budgeted estimate for the current fiscal had been at Rs 191.58 crore. LIC's funding to state governments budgeted for the current fiscal stands at Rs 1,337.37 crore.

On Thursday, the chief minister of state for Kerala A K Antony, told the press in Thiruvananthapuram that the cash-crunch state was seeking Rs 200 crore from LIC to tide over the financial crises in running the government.

Antony reportedly told reporters that the state's overdraft was Rs 344 crore, which was more than the permitted Rs 129 crore. It was not possible to carry on with a government that paid its employees by borrowings without doing any welfare measures for the common man, Antony said, referring to the demand by striking government employees and teachers to restore their fringe benefits.