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<ul class="summary-list"><li>The Department of Government Efficiency wouldn't be a department, but an outside advisory group.</li><li>Under current law, Congress needs to approve most budget changes, limiting the DOGE's power.</li></ul>President-elect Donald Trump on Wednesday announced a new effort to slash what he sees as federal inefficiency, with Elon Musk as cost-cutter-in-chief.Trump <a target="_blank" href="https://www.businessinsider.com/elon-musk-trump-cabinet-election-x-2024-9">made good on a campaign promise</a> when he tapped Musk to co-lead the proposed "Department of Government Efficiency," or DOGE, alongside former GOP presidential candidate Vivek Ramaswamy.Musk says he wants to cut $2 trillion from the federal budget to make it more efficient and effective. Beyond that, though, little is known about how the DOGE will function and how much power it — <a target="_blank" href="https://www.businessinsider.com/trump-adopts-elon-musk-plan-cut-government-spending-efficiency-reform-2024-9">and Musk</a> — will have.Musk did not respond to Business Insider's request for comment for this article. A representative for Ramaswamy declined to comment.<h2 id="2dc0c03e-9977-4403-9201-3d55e844524d">What do we know about the DOGE?</h2>Despite its name, the DOGE will <a target="_blank" href="https://www.businessinsider.com/elon-musks-doge-gets-a-government-checkmark-on-x-2024-11">not actually be a government department</a>, as departments are permanent and can only be created by Congress. Instead, it will function "outside of the government" and disband by July 4, 2026, Trump said in a statement.<div type="image" title="Trump and Musk at a rally" height="2584" width="4184" msid="115360794" hostid="261" sizebytes="161264"></div>The name DOGE is an homage to Musk's preferred cryptocurrency, Dogecoin, which shot up in value after Trump won the election. Under current law, the DOGE might not be able to accomplish much, since Congress controls federal spending."They have no power. No power at all," Elaine Kamarck, a senior fellow at the nonpartisan Brookings Institute who led efforts to reform the federal government under former President Bill Clinton, told Business Insider. "They do make recommendations, and once they make recommendations, the expectation is that the government will act on them."There's no guarantee that a recommendation will turn into a policy, especially given that many of the DOGE's suggestions will likely require congressional approval, Kamarck said.<h2 id="0f11a880-6c1f-4025-a722-a860ae33d16c">The DOGE's $2 trillion goal is something of a pipe dream.</h2>Federal spending <a target="_blank" href="https://www.businessinsider.com/trump-elon-musk-vivek-ramaswamy-department-government-efficiency-doge-2024-11">reached $6.75 trillion in 2024</a>. Multiple experts told BI that it's unlikely Musk will be able to cut his desired $2 trillion without sacrificing programs that have wide bipartisan support or fall under federal mandatory spending, like Medicare and Social Security. Kamarck called the $2 trillion goal the "most unrealistic" part of the whole DOGE plan.Trump has long been preoccupied with cutting what he sees as Washington's waste and fraud."The Department of Government Efficiency (DOGE) will ultimately be staffed and dedicated to this mission," Brian Hughes, a spokesperson for Trump's transition team, told BI in a statement.Quoting former Rep. Barney Frank, Kamarck said that excess federal spending is "marbled" <a target="_blank" href="https://www.businessinsider.com/elon-musk-vivek-ramaswamy-doge-government-efficiency-what-us-spends-2024-11">throughout the budget</a>, like fat throughout a steak, making the DOGE's desired $2 trillion in cuts tricky."It just doesn't work, unless you decide to start cutting Social Security benefits or Medicare, at which point all hell breaks loose," she told BI. "And you know, the bromance between Trump and Musk will end very quickly."Known for <a target="_blank" href="https://www.businessinsider.com/elon-musk-efficiency-companies-tesla-spacex-x-2024-11">streamlining efficiency at his companies</a>, Musk says he wants to cut bureaucracy, shrink the federal workforce, and trim the number of federal agencies down to no more than 99 (there are currently <a target="_blank" href="https://www.federalregister.gov/agencies">more than 440</a>).Douglas Holtz-Eakin, the former director of the Congressional Budget Office, told BI that he doubted that the loosely defined group would be able to accomplish much given its sprawling $2 trillion target."It is hard for me to get seriously ginned up about it until there's a real structure there that suggests that this makes some sense and has a purpose," he said. "If something is designed to do everything, it will do nothing."<h2 id="6bcaf431-1be5-4839-9b83-d0f24a7146cf">The DOGE will exist "outside of government."</h2>In one scenario, the DOGE could function as an advisory committee, which Trump can create through an executive order. The president-elect said the DOGE will work with the Office of Management and Budget, which prepares the president's budget request for Congress."They have made clear that this is a non-governmental department, which is not a familiar term, and so it's not really clear how the organization will operate because of that," Lisa Gilbert, co-president of the progressive nonprofit advocacy group Public Citizen, told BI. "It might be an advisory committee of non-governmental actors, but even from that posture, it won't have the authority to alter budgets or fire employees or rescind regulations."<div type="image" title="Donald Trump and Elon Musk" height="1910" width="2707" msid="115360796" hostid="261" sizebytes="118134"></div>Kamarck said that there are specific rules laying out how much interaction external committees can have with the government, but it's not clear how Trump, Musk, and Ramaswamy envision the <a target="_blank" href="https://www.businessinsider.com/elon-musk-doge-hiring-staff-how-to-apply-2024-11">internal infrastructure of the DOGE</a>."How are they going to talk to each other? How are they going to meet with each other? Are they going to go talk to anybody in the government, or are they just going to make up things from 50 miles away?" she said.On November 14, the DOGE <a target="_blank" href="https://x.com/DOGE/status/1857076831104434289">said in a post on X</a> that it is seeking "super high-IQ small-government revolutionaries willing to work 80+ per week on unglamorous cost-cutting." Musk said on his <a target="_blank" href="https://x.com/elonmusk/status/1857112441529700671">personal X account</a> that the positions will not be paid.<h2 id="4c25da3e-39de-44e2-a1c5-c7249f9fc728">Trump has talked about changing a key law that limits his federal spending power.</h2>Trump, Musk, and Ramaswamy may try to circumvent the congressional obstacles standing in the way of their cost-cutting agenda. Last year, Trump expressed interest in going after the Impoundment Control Act, a 1974 provision that requires the president spend funds that Congress has appropriated."Bringing back Impoundment will give us a crucial tool with which to obliterate the Deep State, Drain the Swamp, and starve the Warmongers," the president-elect <a target="_blank" href="https://www.donaldjtrump.com/agenda47/agenda47-using-impoundment-to-cut-waste-stop-inflation-and-crush-the-deep-state">said in a video</a> in June 2023.Holtz-Eakin said attempting to skirt the impoundment act would be like rewriting history, and Kamarck told BI that any attempt to not spend money that Congress has appropriated poses big Constitutional questions."If he tries to change the law so that he can impound funds, my guess is there'll be a fight in the Congress and he'll lose," she said.<h2 id="4956dc95-91da-4028-b1b3-d843a1509397">Musk could bump up against many conflicts of interest but likely wouldn't have to divest from his companies.</h2>If the DOGE is a federal advisory committee, Musk and Ramaswamy would likely be "special government employees," who are experts or consultants that can work for a federal agency or the White House for up to 130 days. They do not get paid and, crucially, would not have to divest from their companies."They've been clear also that they're staying in their roles as the heads of companies and in other places," Gilbert said. "Not being a part of government means they don't have to deconflict themselves."In a press release for Public Citizen, Gilbert said that Musk's "own businesses have regularly run afoul of the very rules he will be in position to attack" as the DOGE co-lead.<div type="image" title="Donald Trump and Vivek Ramaswamy" height="5504" width="8256" msid="115360795" hostid="261" sizebytes="4296554"></div>In the role, Musk and Ramaswamy would still be bound to federal ethics laws and have to recuse themselves from conversations that affect them personally, <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-11-14/doge-what-can-musk-do-with-the-department-of-government-efficiency?srnd=homepage-americas">Bloomberg</a> reported. With his companies under investigation from at least 20 federal regulatory agencies and SpaceX having more than $15 billion in federal contracts, Musk could face many such conflicts.Kamarck said that there's no "firm line" about when employees need to take themselves out of discussions, but that lawyers address questions on a case-by-case basis.Musk has expressed public frustration with what he views as overbearing federal oversight, which he said has <a target="_blank" href="https://www.nytimes.com/2024/11/12/us/politics/elon-musk-vivek-ramaswamy-trump.html">slowed down his pace of business</a>.By law, meetings of advisory committees, like the kind the DOGE could be, need to be open, and Musk has no problem with the <a target="_blank" href="https://www.businessinsider.com/elon-musk-doge-leaderboard-federal-government-spending-trump-2024-11">transparency</a> — in fact, he seems to invite it. In a post on X, the billionaire promised to post all of the group's actions online <a target="_blank" href="https://www.businessinsider.com/elon-musk-leaderboard-government-spending-marketing-genius-doge-donald-trump-2024-11">"for maximum transparency</a>" and said the public should chime in with their opinions.It's also possible the group might intentionally avoid becoming a federal committee because of the increased oversight and scrutiny, Holtz-Eakin said."It's not a federal committee as far as I can tell," he said. "I think that's deliberate. If you do that, then you're subject to lots of things like a conflict of interest you have to sign off on, and I think that would be a nightmare for Mr. Musk. And so they're not going to let it tiptoe toward federal jurisdiction."Until Trump actually forms the DOGE, if he ever does, the legal and bureaucratic details remain murky, and the experts BI spoke with aren't convinced that it will work well."It sounds a little screwy, frankly," Kamarck said.

How Elon Musk's Department of Government Efficiency could actually work

<ul class="summary-list"><li>Elon Musk's X is the least trusted Big Tech company, a survey found.</li><li>Only 28% of respondents trusted X, which is about how many trusted the US government.</li></ul>Americans think <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-twitter">Elon Musk's X</a> is as trustworthy as the US government. And that's not a compliment.A May survey published by All About Cookies, a company promoting digital security and online privacy, asked 1,000 US adults how much they trusted Big Tech and media companies compared to their government. <a target="_blank" class="" href="https://www.emarketer.com/content/more-adults-trust-big-tech-media-companies-than-us-government?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=cotd+9.20.2024&amp;utm_id=cotd+9.20.2024&amp;utm_content=cotd+9.20.2024&amp;jid=134074&amp;sid=24104937">EMARKETER</a>, a market research company owned by Business Insider's parent company, shared the survey data on Friday.While companies like Amazon and Google topped the list, Musk's platform came in dead last.The survey's data showed that 70% of respondents trust Amazon, 65% trust Google, and 64% trust Netflix. Only 29% trusted <a target="_blank" class="editor-rtfLink" href="https://www.businessinsider.com/tiktok-short-videos-perfect-platform-for-misinformation-about-ukraine-2022-3">TikTok</a>, which ByteDance, a Chinese company, owns. US officials worry that ByteDance shares data with the Chinese government and have demanded it divest TikTok to an American-owned company or face a nationwide ban.Even fewer — only 28% of respondents — however, trusted X, the same percentage that trusted the US government. The survey showed that 43% of respondents distrusted the US government, while 44% distrusted X.Although the survey didn't clarify why respondents ranked X last on the list, the platform has been a magnet for controversy since Musk <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-twitter">purchased Twitter</a> in 2022 for $44 billion, rebranded it, and overhauled how it moderates content.<div type="image" title="Graph shows which Big Tech companies Americans trust more than Elon Musk's X." height="862" width="1048" msid="113558134" hostid="261" sizebytes="30572"></div><h2 id="c7d2940e-0051-4b1d-8599-2c5bf5bfbb9a">Musk's approach to content moderation</h2>Musk <a target="_blank" class="editor-rtfLink" href="https://www.businessinsider.com/read-blunt-email-telling-twitter-staff-jobs-axed-layoffs-2022-11">conducted mass layoffs</a> after taking control of Twitter, particularly among its <a target="_blank" class="editor-rtfLink" href="https://www.businessinsider.com/x-social-media-misinformation-swamping-fake-news-trust-safety-2023-10">trust and safety team</a>, whose numbers dwindled from about 230 employees to about 20. More trust and safety staffers were <a target="_blank" class="editor-rtfLink" href="https://www.businessinsider.com/new-twitter-layoffs-hit-trust-and-safety-workers-again-2023-9">laid off</a> the following year.<a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-twitter-executives-fired-quit-takeover-agrawal-segal-edgett-2022-11">Yoel Roth</a>, once the head of the trust and safety team, resigned from the company soon after Musk's arrival.Concerns about misinformation on the social media app grew quickly after Musk's purchase, so he launched <a target="_blank" class="editor-rtfLink" href="https://www.businessinsider.com/musk-renames-birdwatch-community-notes-touts-improving-accuracy-2022-11">Community Notes in 2022</a>. A 2023 Bloomberg report said it <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-x-community-notes-delay-in-flagging-fake-news-2023-11">analyzed almost 400 X posts</a> that contained false information about the ongoing conflict between <a target="_blank" class="editor-rtfLink" href="https://www.businessinsider.com/israel-fed-up-massive-protest-strike-demanding-gaza-deal-hostages-2024-9">Israel and Gaza</a>, however, and found that it typically took more than seven hours for a Community Note to appear, and some took 70 hours.Musk himself has faced backlash for his own questionable posts, including in 2023 when <a target="_blank" class="" href="https://www.businessinsider.com/musk-faces-consequences-for-calling-antisemitic-tweet-actual-truth-2023-11">business leaders criticized him</a> for amplifying an antisemitic post on X. He backtracked in January during a conference hosted by the European Jewish Association, saying he was "naive" about antisemitism and is <a target="_blank" class="editor-rtfLink" href="https://www.businessinsider.com/elon-musk-jewish-by-association-after-auschwitz-tour-2024-1">"Jewish by association."</a><div type="image" title="Elon Musk with his hands together in front of his mouth." height="2891" width="3848" msid="113558135" hostid="261" sizebytes="338584"></div>Musk is now dealing with the fallout from another X post this month after former President Donald Trump survived a <a target="_blank" class="editor-rtfLink" href="https://www.businessinsider.com/elon-musk-kamala-harris-post-x-twitter-advertiser-mess-2024-9">second apparent assassination attempt</a>. Musk asked in the post why President Joe Biden and Vice President Kamala Harris haven't also faced similar threats.Musk's post immediately drew backlash for promoting political violence, prompting him to delete it and defend himself, calling it a "joke." The <a target="_blank" class="editor-rtfLink" href="https://www.businessinsider.com/secret-service-elon-musk-investigation-tweet-biden-kamala-assassination-2024-9">US Secret Service</a> told Bloomberg News it is "aware" of Musk's post and is investigating the matter.Musk's X has also run afoul of multiple foreign governments, most recently in Brazil, where X lawyers on Friday <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-x-brazil-free-speech-battle-over-2024-9">finally capitulated to demands</a> for stricter content moderation months after the country's Supreme Court ordered a nationwide ban of the platform.Representatives for X did not respond to a request for comment from Business Insider.

Elon Musk's X is the least-trusted Big Tech company, according to a survey — on par with the US government

<ul class="summary-list"><li>President Joe Biden signed the TikTok divest-or-ban bill into law on Wednesday.</li><li>TikTok said it would challenge the law in court, citing First-Amendment violations.</li></ul>Congress passed a bill this week that will<a target="_blank" href="https://www.businessinsider.com/tiktok-ban-explainer-bill-courts-2024-4"> force TikTok's owner to sell its US assets</a> or face removal from mobile-app stores. President Joe Biden signed the bill into law on Wednesday. Parent company ByteDance now has between 9 months and a year to sell or spin off the app in the US.What comes next will be an all-out legal battle.<a target="_blank" href="https://www.businessinsider.com/tiktok-leaked-memo-sent-staff-congress-stepped-up-ban-2024-4">TikTok has vowed to "move to the courts,"</a> where it plans to challenge the law as "a clear violation of the First Amendment rights of the 170 million Americans on TikTok," per an internal memo sent to staff on Saturday. The company will likely ask for a preliminary injunction, stopping the countdown clock on its sale until legal questions are sorted out.Other parties, like<a target="_blank" href="https://www.businessinsider.com/tiktok-creators-file-the-first-lawsuit-against-montanas-ban-2023-5"> TikTok creators</a>, may launch separate legal challenges in the coming weeks, as they have done in the past. First-Amendment-focused organizations like the ACLU or the EFF could file amicus briefs defending TikTokers' free-speech rights.Will these legal challenges work? Maybe…Earlier attempts to ban or force a sale of TikTok often haven't stood up in court.Trump's 2020 order to ban TikTok was<a target="_blank" href="https://www.businessinsider.com/tiktok-ban-injunction-federal-judge-says-donald-trump-exceeds-ieepa-2020-9"> halted by a federal judge</a> who said it likely exceeded executive authority. A Montana law that attempted to ban the app was<a target="_blank" href="https://www.npr.org/2023/11/30/1205735647/montana-tiktok-ban-blocked-state"> struck down</a> in 2023 by a federal judge who said it overstepped state power and "likely violates the First Amendment."This time, however, could be different. The reason? Congress is arguing that TikTok poses a national-security risk, and the courts tend to defer to that governing body when it comes to issues of national security, experts told Business Insider. The federal government has more authority on that subject than a state like Montana does."The court will look at the merits of the case, but really driven by deference to Congress as having much more understanding of the national-security risks than the judges themselves do," Matthew Schettenhelm, a senior litigation analyst at Bloomberg Intelligence, told BI. Schettenhelm estimated the law had a 70% chance of surviving a legal challenge.<h2>It's a coin toss when national-security interests come up against speech protections</h2>If this law wasn't about protecting national security, TikTok's case would be a slam dunk. Its argument that the law violates free speech is clear, as passing a bill that could lead to a ban will box out tens of millions of Americans from an app they use to say things every day.While the bill is framed around forcing new ownership of TikTok, it's likely to result in a ban, which strengthens the free-speech argument. The Chinese government has signaled it opposes a TikTok divestment. Its foreign ministry said last month that a forced sale was "sheer robbers' logic." Its government has the<a target="_blank" href="https://www.npr.org/2024/04/22/1246391855/tiktok-ban-congress-biden-china-lawsuit"> final say</a> on the export of TikTok's algorithm, which would make the app much harder to spin-off.Restricting free speech would be a big problem for the bill if it didn't have national-security interests at its core. While First-Amendment arguments are well supported in court, national-security concerns also have a lot of sway, legal experts told BI."The First Amendment is the trump card that basically allows you to prevail if you can plausibly make a First-Amendment argument," said G.S. Hans, an associate clinical professor of law at Cornell Law School and associate director of its First-Amendment clinic. "National security also is a trump card, and the government often wins when it claims that. The question for me is, which trump card does the court think is more valuable?"Security arguments have stood up in the past for more narrow cases against TikTok. A federal judge<a target="_blank" href="https://www.reuters.com/legal/us-judge-upholds-texas-tiktok-ban-state-owned-devices-2023-12-11/"> upheld a Texas law</a> that blocked state employees from using the app on state-owned devices and networks, saying it was a "reasonable restriction on access to TikTok in light of Texas's concerns."<h2>Show us your smoking-gun evidence, Congress</h2>Legal experts said the evidence the US government brings to court to prove that TikTok is a national-security risk will be central to its case. It has to demonstrate that a forced divestiture or outright ban is necessary."It can't be just conclusory, or in other words to say, 'We think there's a national security threat. Therefore we should ban the app,'" said Lena Shapiro, director of the First Amendment clinic at the University of Illinois College of Law. "They have to provide evidence."Congress' bipartisan bill is the culmination of years of<a target="_blank" href="https://www.businessinsider.com/tiktok-employees-feel-numb-latest-political-attacks-washington-2024-3"> political attacks from Washington on TikTok's operations</a>. Politicians fear its owner ByteDance, which is headquartered in China, could be forced to share US user data with the Chinese Communist Party because of a standing National Intelligence Law. US officials have also raised concerns that the CCP could use TikTok to censor or promote information and even influence an election, serving its own interests. TikTok has denied both of these claims."We believe the facts and the law are clearly on our side, and we will ultimately prevail," a TikTok spokesperson told BI in a statement. "We have invested billions of dollars to keep US data safe and our platform free from outside influence and manipulation."Congress hasn't proven that an outright sale or ban of TikTok is the only way to protect national-security interests. Other less severe efforts like a national data privacy law could solve some of its concerns without limiting speech, for example."The government bears the burden of pointing to an important interest in instituting this law," said Ramya Krishnan, a senior staff attorney at the Knight First Amendment Institute at Columbia University, which filed a legal challenge against Texas's state-device ban last year. "There's the onus of showing that it could not achieve its interest in narrower ways."

Legal experts say the TikTok divest-or-ban bill could stand up in court despite being a free-speech disaster

The mega IPO of Life Insurance Corporation of India (<keyword id="6367143" type="General" weightage="20" keywordseo="lic" source="Orion">LIC</keyword>) will be out by the end of the current fiscal, a senior Central government official said on Monday. According to Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), the IPO plan is on course. "Some media speculation doubting the feasibility of <keyword id="7922409" type="General" weightage="20" keywordseo="lic-ipo" source="Orion">LIC IPO</keyword> this fiscal year is not correct. It is reiterated that plan is on course for the IPO in the last quarter of this fiscal," the Secretary tweeted. The IPO is expected to become the biggest one in India and it may fetch the government around Rs 1 lakh crore. Post the Union Budget FY22, the government has taken several legislative and executive steps to pave way for the mega IPO. The LIC, a statutory Corporation constituted under the LIC Act 1956, is a leading life insurer of India wholly owned by the government. It has three branches outside India - in the UK, Fiji and Mauritius, a wholly-owned subsidiary in Singapore and Joint Ventures in Bahrain, Kenya, Sri Lanka, Nepal, Saudi Arabia, and Bangladesh. Its subsidiaries in India include LIC Pension Fund Ltd, and LIC Cards Services Ltd. Its associates include the IDBI Bank Ltd, the LIC Mutual Fund and the LIC Housing Finance Ltd. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/these-9-stocks-are-down-as-much-as-15-since-being-the-top-diwali-picks-6-weeks-ago/articleshow/88387967.cms">From ICICI Bank to INOX, these 9 stocks are down as much as 15% since being the top Diwali picks 6 weeks ago</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/how-do-rising-covid-19-cases-lead-to-a-fall-in-markets/articleshow/88385905.cms">Why is the stock market falling so sharply today?</a>

LIC IPO to be launched between Jan-Mar 2022

Listing of <keyword id="6365973" type="COMPANY" weightage="20" keywordseo="life-insurance-corporation">Life Insurance Corporation</keyword> (LIC) and sale of government's stake in IDBI Bank may be delayed beyond March 2021, due to depressed valuation amid COVID-19 pandemic. The government aims to garner Rs 90,000 crore from the listing of LIC and stake dilution in IDBI Bank out of total the disinvestment target of Rs 2.10 lakh crore during the current fiscal. Finance Minister Nirmala Sitharaman while presenting the Budget 2020-21 had announced stake sale in LIC through an initial public offer in the current financial year. <div type="Youtube" id="WYbWln2KsuA" title="Budget 2020: LIC to get Privatised" thumbUrl="https://i.ytimg.com/vi/WYbWln2KsuA/mqdefault.jpg"></div> Given the prevailing market situation, it seems to be difficult to do the LIC stake sale in the current fiscal as the situation is not conducive, sources said. Besides, they said, there will not be a matching appetite for the mega issue of LIC in the present market condition. Due to COVID situation, the government recently for the second time extended the deadline for bidding for privatisation of India's second-biggest oil marketing company Bharat Petroleum Corp Ltd (BPCL) by over a month to July 31. The government currently owns 100 per cent in LIC, while it holds around a 46.5 per cent stake in IDBI Bank. The sources said, the government will have to cut down its expected realisation from stake dilution of both LIC and IDBI Bank even if the market condition improves. So, selling them at low valuation would be an imprudent decision, they added. Besides valuation, the sources said, listing of LIC involves a lot of regulatory clearances and more importantly amendment to the LIC Act itself. Market participants had already termed the listing of insurance behemoth LIC as IPO of the decade akin to the Saudi Aramco listing. The 60-year-old state-owned firm, LIC is the country's largest insurer, controlling more than 70 per cent of the market share. The insurer has a market share of 76.28 per cent in number of policies and 71 per cent in first-year premiums. LIC has many subsidiaries, including IDBI Bank. Turning the corner, IDBI Bank on Saturday posted a profit of Rs 135 crore for the March quarter on account of recoveries from bad loans. The lender reported a profit after 13 straight quarters of net losses. The bank had posted a net loss of Rs 4,918 crore in the corresponding period of last year. In January 2019, LIC completed acquisition of 51 per cent controlling stake in the lender. The state-owned life insurer infused Rs 21,624 crore into the bank. The bank, which is under the Reserve Bank of India's prompt corrective action (PCA) framework, said it has achieved all PCA parameters for exit except return on asset. SEE ALSO: <a href="https://www.businessinsider.in/budget/news/india-moves-to-unlock-value-from-insurance-behemoth-lic-whose-corpus-is-at-31-lakh-crore/articleshow/73836245.cms">The biggest IPO of the next financial year ⁠— LIC, whose corpus is at ₹31 lakh crore</a> <a href="https://www.businessinsider.in/business/news/nirmala-sitharaman-says-the-lic-ipo-will-benefit-retail-investors/articleshow/74008705.cms">Nirmala Sitharaman says the LIC IPO will benefit retail investors</a> <a href="https://www.businessinsider.in/business/news/govt-to-retain-management-control-in-lic-after-listing-sitharaman/articleshow/74459403.cms">Govt to retain management control in LIC after listing: Sitharaman</a>

India's largest-ever IPO may be shelved until next year

<ul class="summary-list"><li>More investors are being encouraged to sell off their assets in fossil-fuel companies.</li><li>Institutional investors are implementing policies that lower their exposure to such companies.</li><li>Funding for renewable energy is growing as a result of the <keyword id="11896316" type="UNKNOWN" weightage="60" keywordseo="divestment" source="Orion">divestment</keyword> movement.</li></ul>For supporters of the movement to divest from fossil fuels, the Intergovernmental Panel on <keyword id="11896311" type="UNKNOWN" weightage="60" keywordseo="climate-change" source="Orion">Climate Change</keyword>'s <a href="https://www.businessinsider.com/climate-ipcc-report-temperature-rise-20-years-15-degrees-2021-8">latest report</a> on the <keyword id="11896310" type="UNKNOWN" weightage="60" keywordseo="climate-crisis" source="Orion">climate crisis</keyword> is further evidence that investors need to shift their capital away from businesses responsible for carbon emissions. One of the biggest financial movements in <keyword id="11896309" type="UNKNOWN" weightage="100" keywordseo="sustainability" source="Orion">sustainability</keyword> is applying social and economic pressure on the capital reserves of fossil-fuel companies. The divestment movement - where investors are encouraged to sell their financial assets connected to coal, oil, and natural-gas companies - was estimated to be worth <a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/investors-slowing-down-on-fossil-fuel-divestment-amid-pandemic-survey-finds-61412797">$14 trillion</a> last year. As more people become aware of the climate crisis, <a href="https://slate.com/technology/2021/06/maine-fossil-fuel-divestment-campus-movements.html">state</a> and <a href="https://www.cbc.ca/news/canada/pension-fund-investments-fossil-fuels-1.6138550">national</a> pension funds, <a href="https://www.dailyprincetonian.com/article/2021/06/princeton-university-divestment-decision-reached-net-zero-board-of-trustees">university</a> endowments, and even the <a href="https://cathstan.org/news/local/archdiocese-of-washington-s-action-plan-offers-practical-steps-for-caring-for-creation">Archdiocese of Washington</a> have announced shifts in investment policies that lower or eliminate their exposure to fossil-fuel companies. ​​Earlier this summer, Maine became <a href="https://news.yahoo.com/maine-becomes-first-state-order-192708619.html">the first US state</a> to pass a law requiring public funds to sell off investments in coal, petroleum, natural gas, and related products by 2026. Many fossil-fuel companies need outside investment capital for their operations, expansion, and plans for growth. The main financial argument against divestment is that it would hurt the returns for investors in companies such as <a href="https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter">BlackRock</a> and pension holders. "Just selling does nothing to address climate change, as ownership of the funds are just being transferred to someone else," Sandy Matheson, the executive director of Maine Public Employees Retirement System, <a href="https://www.bloomberg.com/news/articles/2021-07-07/pension-fund-director-makes-a-case-against-fossil-fuel-divestment-green-insight?sref=P6xXtEaF">told Bloomberg Green</a> in July. "That's true, both in the private and public markets."But the Rockefeller ​​Brothers Fund, a major philanthropic organization, said this was <a href="https://www.rbf.org/news/five-years-out-oil-rbf-isnt-looking-back">not the case</a>, and the contrarian investment strategist Jeremy Grantham published a <a href="https://www.lse.ac.uk/granthaminstitute/news/the-mythical-peril-of-divesting-from-fossil-fuels/">report in 2018</a> showing a relatively small difference when any sector was removed from a portfolio. Investors are also affected by damages from the rising number and increasing severity of natural disasters related to the climate crisis. This summer, there has already been extreme flooding in <a href="https://www.nbcnews.com/news/world/least-44-killed-severe-flooding-mudslides-turkey-n1276829">Turkey</a>, <a href="https://www.theguardian.com/environment/2021/jul/16/climate-scientists-shocked-by-scale-of-floods-in-germany">Germany</a>, <a href="https://www.npr.org/2021/07/21/1018764692/china-blasts-dam-to-divert-massive-flooding-that-has-killed-at-least-25">China</a>, Belgium, and, on Monday, <a href="https://www.azcentral.com/story/news/local/arizona-breaking/2021/08/16/ducey-issues-emergency-declaration-after-serious-flooding-gila-bend/8153521002/">Gila Bend, Arizona</a>.The divestment movement is also important because it often happens <a href="https://www.theguardian.com/environment/2020/nov/23/investors-plan-major-move-into-renewable-energy-infrastructure">in tandem with shifts</a> to greater funding for renewable- and low-carbon-energy infrastructure, said many of the <a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/investors-slowing-down-on-fossil-fuel-divestment-amid-pandemic-survey-finds-61412797">investors polled</a> by the asset manager Octopus Investments Ltd. last year. As more companies, governments, and organizations announce transitions to net-zero carbon emissions, investments in the clean-energy sector totaled <a href="https://ieefa.org/wp-content/uploads/2021/07/Global-Investors-Move-Into-Renewable-Infrastructure_July-2021.pdf">$501 billion</a> last year - 9% more than 2019.This financial shift is also happening among institutional investors. In one of BlackRock's <a href="https://www.blackrock.com/corporate/investor-relations/blackrock-client-letter">annual letters</a>, the investment firm said the amount globally invested by mutual funds and exchange-traded funds into sustainable products between January and November 2020 rose to $288 billion, a 96% increase compared to all of 2019.Divestment from fossil fuels is only one part of how companies, governments, and investment organizations are becoming more sustainable. It's one of the clearest business shifts, but it's a movement in response to the growing realization that there are far fewer profits or kinds of shareholder value that can be made on a planet too warm to sustain human life.

Fossil-fuel companies need investors to operate. Could the IPCC report help push for more divestment from them?

<ul><li>The sale of the national carrier has always been a politically sensitive issue.</li><li>Reports suggest that the government may sell the airline but transfer just a fourth of the company's debt.</li><li>The proposal may give Narendra Modi's rivals ammunition to attack him for selling a national asset cheap.</li></ul>The sale of Air India has been contemplated for years, unsuccessfully. An attempt made in 2018 failed too. Now, there is a consensus like never before that the ailing national carrier must be disposed off to a willing investor. But, there may be a new twist in the tale that may make the issue political once again. According to an <a href="https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/new-air-india-sale-offer-may-keep-working-capital-debt-out/articleshow/71176962.cms" data-type="tilCustomLink" target="_blank">Economic Times report citing sources</a>, the government is looking to reduce the amount of debt on the books to a fourth of its original amount before selling the airline. When the government invited bids for Air India in 2018, the debt on the books was close to ₹59,000 crore. Of that, ₹29,400 crore was moved to a special purpose vehicle (SPV) that houses debt and assets of the national carrier. This amount is being repaid through government-guaranteed bond issues in three batches. Of the ₹30,000 crore remaining, about ₹15,000 crore is working capital debt, which the government may reportedly bear the burden. So, the potential buyer will only have the remaining ₹15,000 crore to shoulder-- just a fourth of the original amount. Making Air India attractive The idea is to make the debt-laden Air India, with all its operational inefficiencies, an attractive proposition for potential buyers. There was no response to the government's last call for bids. However, some of the factors have changed since last year. On the upside, the disappearance of Jet Airways from the Indian skies has helped airlines charge more for tickets and make some money out of it. So much so that Air India is hoping to turn profitable this year, for the first time in over a decade. On the downside, while India's aviation sector is expected to become the world's third largest aviation market by 2024, according to the International Air Transport Association, the passenger traffic has slowed down in recent months and that has dented performance for all airlines. The government is also hamstrung by its own ideological parent, the Rashtriya Swayamsevak Sangh's insistence that the airline must not be sold to a foreign peer. That leaves very few interested parties who may be interested or can afford to spend on buying an airline. While on the balance, the government will weigh out all its options, Prime Minister Narendra Modi's political rivals are unlikely to miss any opportunity possible to corner the government finding faults in the sale of Air India, a national asset that has evoked strong emotions in the past. SEE ALSO: <a href="https://www.businessinsider.in/emirates-wont-buy-air-india-but-spicejet-flights-under-code-share-likely-by-diwali/articleshow/70970408.cms" data-type="tilCustomLink" target="_blank">Emirates is not interested in Air India but is excited about its code share with SpiceJet</a>

Indian government is looking to sell Air India but may keep its debt

<ul><li>Strategic divestments in <keyword id="2573" type="COMPANY" weightage="20" keywordseo="Air-India">Air India</keyword>, BPCL and Container Corporation are "unlikely" to be completed in FY20.</li><li>The ministry has budgeted to garner Rs 1.05 lakh crore from divestments during the fiscal.</li><li><keyword id="6470244" type="UNKNOWN" weightage="20" keywordseo="dipam">Dipam</keyword>'s joint secretary Anuradha Thakur said the government is working hard with the regulators in order to ensure that the bond market gets maximum traction. </li></ul> In what can potentially hurt the fiscal math for the ongoing fiscal, a senior government official said strategic divestments in Air India, BPCL and Container Corporation are "unlikely" to be completed in FY20.
 Work on all these companies is on and the process is facing delays due to "surprises" encountered once the wheels have begun moving, the official from the Department of Investment and Public Asset Management (Dipam) said.
 The ministry has budgeted to garner Rs 1.05 lakh crore from divestments during the fiscal. The government has already breached the budgeted fiscal deficit gap and the extent of the gap stands at 115 per cent with four months to go.
 The official declined to comment on the impact of such events on the fiscal math.
 When asked if the strategic divestment in the <keyword id="156368" type="DOMAIN" weightage="20" keywordseo="Bharat-Petroleum-Corporation">Bharat Petroleum Corporation</keyword> (BPCL) -- which can alone fetch the government over Rs 60,000 crore if it were to sell its entire 53 per cent stake -- will be completed this fiscal, the official said, "unlikely". "We are not saying that for ourselves and our timelines are such that it should happen. But we know that the process throws up surprises," the official said speaking on the sidelines of an event here.
 Similarly, on Container Corporation (Concor) and Air India as well, the official said that the sales will not go through in the current fiscal ending March 31.
 The official said the government is preparing the financial statements and getting the data room ready for the sales, suggesting that such aspects take time.
 Till now, the industry has shown "excitement" over the companies which are being floated, the official said, adding that there are additional details which may be sought by potential bidders.
 When asked about the strategic sale in Shipping Corporation of India (SCI), the official said the sale is at a certain stage and going strong.
 The government, which had exceeded the budgeted divestment target last fiscal, has mopped up only Rs 12,359 crore of the Rs 1.05 lakh crore target as of September. According to media reports, the stake sale in SCI can fetch it Rs 2,000 crore and over Rs 13,000 crore can accrue from Concor.
 Meanwhile, Edelweiss Mutual Fund's Bharat Bond Exchange Traded Fund listed on the National Stock Exchange on Thursday with a marginally down opening.
 Dipam's joint secretary Anuradha Thakur said the government is working hard with the regulators in order to ensure that the bond market gets maximum traction.
 The next step for the stakeholders is to ensure that there is trading in bonds in the secondary market which will ensure liquidity for investors, she said.
 Rashesh Shah, the chairman and chief executive of Edelweiss, said the corporate bond exchange-traded fund (ETF) is the culmination of years of efforts by government, regulators and his group, and also added that it provides stability for investors as it includes only AAA-rated public sector bonds.

Indian government might not be able to close Air India BPCL divestments this fiscal

Mumbai, The <keyword id="50847" type="General" weightage="20" keywordseo="reserve-bank" source="Orion">Reserve Bank</keyword> on Friday approved Rs 87,416 crore dividend payout to the central government for 2022-23, nearly triple of what it paid in the previous year. The dividend payout was Rs 30,307 crore for accounting year 2021-22. The decision was taken at the 602nd meeting of the Central Board of Directors of Reserve Bank of India held under the chairmanship of Governor <keyword id="6359111" type="General" weightage="20" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword>. "The board approved the transfer of Rs 87,416 crore as surplus to the central government for accounting year 2022-23, while deciding to keep the Contingency Risk Buffer at 6 per cent," <keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword> said in a statement. The board also reviewed the global and domestic economic situation and associated challenges, including the impact of current global geopolitical developments. The board also discussed the working of RBI during 2022-23 and approved the annual report and accounts of the central bank for the year. Madan Sabnavis, chief economist of Bank of Baroda said that this surplus transfer will come in very handy and ensure that the government managed it fiscal numbers with relative ease given that there are question marks on the divestment programme. "The Budget had looked at a number of Rs 48,000 crore as dividend from banks and RBI. RBI has overshot this number with the transfer of Rs 87,000 cr. This was enabled by higher earnings on sale of forex during the year, better returns on forex investments in US treasuries (though value of bonds would have fallen which has to be charged to the contingency reserve), revaluation of forex assets and adjustments in reserves as per the Bimal Jalan Committee recommendations. The RBI would have had higher pay-outs due to the higher SDF rates with the system being in surplus all through the year," Sabnavis said. According to him, public sector banks have also reported very good profits and announced dividend, there will be higher flows of dividends from this source too. Add to this the possible higher dividend payments by the oil marketing companies and the situation appears quite comfortable from a market perspective as this will not lead to higher market borrowings. (With inputs from PTI)

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