The Life Insurance Corporation’s investment in tobacco major ITC has once again come under the scanner following the Public Interest Litigation filed by Tata managing trustee R Venkataramanan, a project manager at Tata Trusts and doctors from Tata Memorial Hospital, questioning the decision, reports Economic Times.
The PIL names the government, state-run insurers, including LIC, and the insurance regulator, and says that the investment is contradictory to the government’s measures to tackle tobacco-related health problems.
Studies show that nearly a million people in India die every year due to health problems arising out of the use of tobacco.
In the past, too, health activists have questioned the government’s decision to invest in the tobacco major.
As of March 31, 2017, the government indirectly owns close to 30 percent in the tobacco major. The stakes are held through the Special Undertaking of the Unit Trust of India (around 9 percent), LIC (around 16 percent) and through other state-owned insurance companies.
ITC now has diversified beyond tobacco and has interests in the hotel, farm and FMCG sectors. However, tobacco remains its most profitable venture and accounts for a sizeable chunk of its revenues and profits.
Global tobacco major BAT has been eyeing a controlling stake in ITC for a while now, but its attempts in the past have been repeatedly thwarted. Recently, LIC hiked its stake in ITC by over 2 percent when the government sold a part of its stake held in SUUTI.