Talk of the government disinvesting its stake in public sector units (PSUs) is the flavour of the season once again. The tone was set by Union Finance Minister Nirmala Sitharaman. In her Budget speech on February 1, she said a renewed privatisation process will garner Rs 1.75 lakh crore to help kickstart the economy. Soon after, about a month ago, Prime Minister Narendra Modi, speaking at a webinar on privatisation, once again reiterated his famous words that ‘the government has no business to be in business’ and his administration is committed to privatising all PSUs barring the four strategic sectors. Echoing the sentiment, Reserve Bank Governor Shaktikanta Das too has confirmed he is in discussion with the government to line up the next round of state-owned banks to be privatised.
On the ground though, there seems to be a wide chasm between words and action. Take the case of Air India. Civil Aviation Minister Hardeep Puri announced a couple of days ago that Air India’s sell-off would be completed by May-end this year. ‘The choice is between disinvesting and closing down’, since the airline had run up an unassailable debt of Rs 60,000 crore, he said. Brave words. This is about the fourth attempt by the government since 2018 to rid itself of Air India; each round so far has been a failure because of a lack of intent and clarity of the exercise.
It is true there is little support for the old Nehruvian position that sees the public sector as the‘commanding heights’ of the economy and there is little stomach for tolerating the continuing losses and inefficiency of many PSUs. However, despite the government repeatedly reiterating that it is committed to privatising non-core sector PSUs, there has been little progress. There is also very little clarity on which PSUs in ‘strategic’ sectors will continue to be protected. Coal mining, oil exploration and distribution, and banking are not only crucial sectors that cannot be subject to a casual privatisation process, but also provide employment to millions of people. The government owes it to the nation to present a fine-tuned policy and a roadmap of its privatisation plans.