During 1998-99, LIC's gross yield of 11.96 per cent on investments was down from 12.37 per cent recorded in 1997-98. The institution has earned the yield over an investible fund of Rs 18,000 crore during the year. The LIC had recorded the maximum return on its investments at 12.39 during 1996-97.

The investment income--which also includes rent receipts of the institution--went up by 16.71 per cent to Rs 13,183.92 crore from Rs 11,296.32 crore during 1998-99. In the previous year, the investment income had grown by 20.23 per cent.

"The overall return on investments in the financial sector has been falling in recent times and LIC cannot be taken as an isolated case,'' an industry analyst said.

According to government guidelines, LIC devotes 75 per cent of its investible funds to the mandated social sector and government papers and the balance goes to the private sector including a marginal exposure in capital market. The institution has repeatedly asked the centre to allow its investment policy to be largely guided by commercial decisions to maximise the returns.

At present, the institution does not have the concept of profit and distributes the entire surplus income in the form of dividend to policy holders. ``The LIC is required to have the profit concept to operate in a new competitive atmosphere,'' analysts pointed out.

During the current financial year the institution has a kitty of almost Rs 21,600 crore worth of investible fund. Its life-fund kitty, which signifies the real growth of the institution, expanded by 20.37 per cent to Rs 1,27,400.06 crore during 1998-99 from Rs 1,06,000 crore in the previous year.

During the year, the expenses of the institution went up by 18.12 per cent to Rs 4,669.50 crore from Rs 3,653.22 crore. The total commission and other benefits towards 5 lakh agents were pegged at around Rs 2,002 crore, up by 10 per cent from Rs 1,700 crore.

LIC's total assets, including the company's investment as well as fixed assets in 1998-99 moved up by 20.74 per cent to Rs 1,32,764.39 crore.

The total income of the institution, which is a combination of investment income and premium income, increased by 18.29 per cent to Rs 36,352.59 crore in 1998-99. It has recorded a growth of 19 per cent in the total income during the year although it has fallen below the targeted figure of Rs 36,699 crore. In the previous year, the total premium income was pegged at Rs 22,805.80 crore, reflecting a growth of 18.46 per cent.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.