NEW DELHI: In a marked departure from its aggressive privatisation pitch in the past, the Narendra Modi-led government seems to have quietly put the disinvestment drive on the back burner.
Confirming this paradigm shift, top government sources told TNIE that privatisation of public sector companies is no longer a priority for the Centre. The new line of thinking is that there is great value to be unlocked in some of the State-owned entities on the block, and that it makes more sense in holding on to such enterprises and making them profitable than giving them away at low prices.
“There has been a change of emphasis and a change of orientation, more towards a balanced view of the benefits of holding versus the benefits selling off. But disinvestment will continue, but will not be the sole priority,” said a source.
This, however, doesn’t mean privatisation plans are on hold; only that sell-off is no longer the priority of the government, which will continue to look for ways to pare down its holdings in some public sector entities.
The Budget has estimated Rs 50,000 collection from disinvestment in FY25. Last year, disinvestment proceeds stood at Rs 16,500 crore against revised estimates of Rs 30,000 crore. Despite its best efforts, the government could privatise only two PSUs – Air India and Neelanchal Ispat Nigam – so far. Stake sale in IDBI Bank is ongoing, and that is the only PSU that may go to a private entity as the government and LIC - which together hold 94.7% per cent in the bank - look to sell a 46 per cent stake to a new entity.
Disinvestment Secretary Tuhin Kanta Pandey recently disclosed that the Reserve Bank of India might soon give clearance on fit and proper criteria for the prospective investors.