The Finance Ministry will step ahead with the already-announced and planned privatisation of state-owned companies in the next fiscal, and the chances of the new addition to that list of CPSEs in the Budget for 2023-24 is unlikely, sources said.
The disinvestment target outlined in the Budget for the next fiscal is expectedto be a scaled-down and realistic one, as the budgeted PSU sell-off target is going to be missed for the fourth year in a row this fiscal. In the current fiscal, the government had budgeted to collect Rs 65,000 crore from disinvestment.
However, as of now, it has realised only Rs 31,106 crore by selling minority stakes in public sector companies. After tasting success in privatising loss-making Air India in 2021, the progress of PSU sell-off has not been very impressive over the past year, and experts say that with the general election around the corner in 2024, no major disinvestment announcement is expected in this Budget either. "The plan is to move ahead with the strategic sale of the companies for which the Cabinet approval is already in place," an official said.
This implies that the government will go ahead with the privatisation of companies like Shipping Corporation of India, NMDC Steel Ltd, BEML, HLL Lifecare, Container Corporation of India and RINL or Vizag Steel, as well as the big ticket IDBI Bank. Considering that strategic sale or privatisation takes at least a year, and in some cases even more, to conclude, a high budgeted disinvestment target may not be achievable.
"The privatization process often takes time, depending on the type of privatization and the economic, social, and political context, emphasizing the importance of a medium-term plan, a solid regulatory framework, and competitive markets". "A multi-year strategic plan for privatisation can be formulated to ensure there is a concrete timeline and a welldesigned sequencing and strategy for privatisation," Nangia Andersen LLP, PartnerGovernment and Public Sector Advisory, Suraj Nangia said:
EY India, Associate Partner, Tax and Economic Policy Group, Rajnish Gupta said the privatisation programme may see an uptick after the 2024 general elections.
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