While announcing economic reforms in the light of Covid-19 imapct on businesses and Governance, India’s Finance Minister has made a big announcement: Every PSU in India will be now privatized, except 4 in strategic sectors.
Is this India’s biggest privatization drive?
In a big decision, Govt has now announced that all PSUs in non-strategic sectors will be privatized, while in the strategic sector, there will be only one to maximum 4 PSUs fully owned by Govt.
Rest every PSU in India will be privatized.Finance Minister Nirmala Sethuraman didn’t reveal the exact dates and the manner in which this mega-exercise will be accomplished.
She said, “In strategic sectors, at least one enterprise will remain in the public sector, but private sector will also be allowed. In other sectors, PSEs will be privatised (timing to be based on feasibility etc),”
She told that in the strategic sector, except 4 PSUs, all will be either given to private companies, or merged, or bought under holding firms.
This mega drive for the privatization of PSUs was made under Atma Nirbhar Bharat Abhiyan stimulus package, wherein Rs 20 lakh crore stimulus is being provided, which is roughly 10% of India’s GDP, and 2/3rd of last Union Budget.
In the current fiscal year, months before the coronavirus pandemic happened, Govt had already committed disinvestment of Rs 2.1 lakh crore via privatization of PSUs, and Rs 1.2 lakh crore via privatization of CPSEs.
As of October, 2019, there were 10 Maharatnas PSUs, 14 Navratnas PSUs and 74 Miniratnas PSUs. Besides, there are nearly 300 CPSEs (central public sector enterprises).
Some of the biggest privatization moves which already have been made include that of Indian Railways, 100% privatization efforts for Air India, and even oil and gas companies like Bharat Petroleum, besides SAIL, Shipping Corp of India (SCI), THDC India and NEEPCO and more.
As per some reports, India Tourism Development Corporation can also be privatized soon.It will be interesting to observe how employees of these PSUs react to the news.