Budget 2020

LIC | Bhagyalakshmi scheme: LIC seeks continuity as Karnataka ropes in India Post

BENGALURU: Life Insurance Corporation of India on Tuesday sought renewed business with Karnataka as the lead operator of Bhagyalakshmi, the state’s flagship social security scheme for girls.

Senior LIC officials led by zonal manager Mini Ipe met chief minister BS Yediyurappa seeking continuity of business, and suggesting modifications to the way the scheme is being implemented.

The government has been offering the scheme since 2007-08 under which it deposits a certain amount in the name of one girl child or two female children born into low-income (BPL) families. LIC is required to provide the family with 1 lakh after the child attains 18 years of age. A family can enrol for the scheme within a year of the child’s birth.

With interest rates softening and the economy running into a downspin, LIC had conveyed its inability to give 1 lakh on the initial investment. The government went through the issue, and in October the Cabinet decided to implement the Bhagyalakshmi scheme on the lines of the Centre’s Sukanya Samriddhi scheme, this time with the help of India Post.

The chief minister, however, asked the LIC team to come back with the best possible package they could offer to the state government, and make a presentation before the finance department.

An LIC executive said they had provided life cover to one of the parents besides a lump sum on the girl on her crossing 18 years of age under the scheme. He added that LIC was implementing the scheme since its beginning, and 26 lakh children were currently under its coverage. They are unable to continue the scheme in the current form and have suggested changes, and will soon revert to the government with a revised pitch, the executive added.

A government official said India Post had offered a good deal under the Sukanya Samriddhi scheme with a far less premium, which would also reduce the financial burden on the state. Banks offer a high interest rate on deposits made under the Sukanya Samriddhi scheme, and the depositor also gets tax benefits.