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MUMBAI : Union finance minister Nirmala Sitharaman on Tuesday said the government will go ahead with the planned initial public offering (IPO) of Life Insurance Corp. of India (LIC), even as Russian forces massing near Ukraine’s borders throw global markets into turmoil.

“There is a buzz in the market and there is interest for LIC IPO. We are going ahead with it," Sitharaman said at a press conference. “We are equally worried if the market situation is conducive," she added.

The draft red-herring prospectus (DRHP) of LIC IPO was filed with Securities and Exchange Board of India (Sebi) earlier this month, with the government planning to sell up to 316.25 million shares or nearly 5% stake in the life insurance giant.

Sitharaman, who is in Mumbai on a two-day visit, has been holding post-budget discussions with industry, trade and financial market stakeholders.

On being asked whether the government will consider tax relief on crude oil, the FM said, “In Financial Stability and Development Council (FSDC) when we looked at the challenges to financial stability, crude was one of them. International worrisome situations where we actually voiced that we wanted a diplomatic solution for the situation that is developing in Ukraine, all these are headwinds. Crude is one of the important considerations. We’ll have to see how it goes. We are keeping a watch."

On the corporate governance lapses at the National Stock Exchange outlined in a recent Securities and Exchange Board of India (Sebi) order, Sitharaman said she could not comment on whether adequate regulatory action was taken. “On NSE, I have no comment to make on whether there was an adequate correctional step taken. I have no view this way or that until I get to the bottom of what is available before me. I am looking into it, but I won’t be able to comment on it," she said.

On the row between the Centre and states over the payment of compensation to the latter, Sitharaman said there is “no adversarial relationship" between the two sides.

“The GST Council has itself decided that compensation cess will continue to be collected until March 2026. This will make up for the 2020 gap that arose in compensation. This extension in GST compensation collection will also be used to pay interest on the borrowed money," she said.

When asked about the cancelled auctions of the government borrowing programme for the current fiscal, Economic Affairs Secretary Ajay Seth, who accompanied Sitharaman at the press briefing, said the market will be informed in advance if the government takes a decision on borrowing. “As far as these (cancelled) bond auctions are concerned, we did not feel the need. So, we did not (borrow from the market).This is a dynamic situation. We have to tell the market in advance. But let me assure, there will not be any surprises for the market," Seth said.

ABOUT THE AUTHOR

Gopika Gopakumar

Gopika Gopakumar has worked for over 15 years as a banking journalist across print and television media. Her expertise lies in breaking big corporate stories and producing news based TV shows. She was part of the 2013 IMF Journalism Fellowship Program where she covered the Annual & Spring meetings of the International Monetary Fund in Washington D.C. She started her career with CNBC-TV18, where she also produced a news feature show called Indianomics and an award winning show on business stories from South India called Up South. She joined Mint in 2016.
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