Centre may cut divest plans
By DECCAN CHRONICLE | Madhusudan Sahoo
Mumbai: The government is learnt to have scaled down its divestment plan for loss-making public sector units (PSUs) in the upcoming Budget 2023 as the budgeted sell-off target of the public sector units is likely to be missed in this current fiscal for the fourth year in a row. So there may be no fresh announcement for divestment for upcoming fiscal, according to a top source in the government.
As announced in the last year budget, the government has mega plan of privatisatising state-owned companies like IDBI Bank, Shipping Corporation of India, NMDC Steel, BEML, HLL Lifecare, Container Corporation of India and Rashtriya Ispat Nigam Limited’s Vizag Steel.
As the strategic sale or privatisation takes at least a year, and in some cases even more time to conclude, the source, however, said the government will go ahead with its already announced privatisation plan in the next fiscal.
In the current fiscal, the government had budgeted to mop up around 65,000 crore from the disinvestment. However, it has so far realised only 31,106 crore, less than half of the targeted amount, by selling minority stakes in public sector companies.
“After privatising loss-making Air India in 2021, the progress of the sale of loss-making public sector units (PSUs) has not been very impressive over the past year. With the general election around the corner in 2024, no major disinvestment announcement is expected in this Budget either,” the source said.
Experts, however, feel that the private sector majors will be keen on buying state-owned companies, if their deal is sweetened with the tax incentives as well as regulatory exemptions. In the past, they have also seen that the government had called off a couple of strategic sales, including oil marketing major BPCL, due to a lack of investor interest.
“The privatisation pro-cess often takes time, depending on the type of privatisation and the economic, social, and political context, emphasising the importance of a medium-term plan, a solid regulatory framework, and competitive markets,” Nangia Andersen LLP, Partner- Government and Public Sector Advisory, Suraj Nangia said.