Journal of Indian School of Political Economy

D. Tripati Rao ¹

Affiliations
1 RBI Endowment Monetary Unit, Department of Economics, Vidyanagari, Santa Cruz (E), Kalina, University of Mumbai, Mumbai-400098, IN

Abstract

The paper, a critical review of the performance of the Indian economy, finds that nowithstanding the remarkable resilience of the economy as a result of stabilisation measures, growth has faltered since the mid nineties. The myopic behaviour of agents [households, firms, commercial banks, the central bank (monetary authority) and the government force 'sub-optimal' outcomes.

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D. Tripati Rao ¹

Affiliations
1 Department of Economics, University of Mumbai, IN

Abstract

Notwithstanding the phenomenal growth of Life Insurance Corporation of India (LIC), the state monolith has come under close scrutiny with regard to its operational efficiency. Against this backdrop, this paper seeks to evaluate the operational efficiency of the LIC, in physical and financial terms. Insurance, being essentially a service industry, a distinct set of criteria (both, physical and financial) have been developed to evaluate its overall efficiency.

There has been a significant improvement in the physical performance of the LIC. But, the financial performance in terms of profitability has not been up to the expected level. However, given the constraints of statutory regulations and government control coupled with a highly cost-prone rural business, the financial performance may be considered as satisfactory although there is a considerable scope for improvement. The LIC should vigorously try to improve its operational efficiency in terms of both the above, to benefit the policy holders and to compete in a liberalised environment.

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