New Delhi: Stressing on the need for privatisation, Union Finance minister Nirmala Sitharaman in her Union Budget 2021 speech on Monday revealed the government's intent to focus more on disinvestment and privatisation.
She proposed to divest two PSU banks and one general insurance company as well. Sitharaman said all divestments announced so far will be completed in FY22, including that of LIC IPO, BPCL, CONCOR, Pawan Hans and Air India. The government set the FY22 divestment target of Rs 1.75 lakh crore.
For the fiscal year 2021-22, out of the total Rs 1.75 lakh crore, Rs 1 lakh crore is to come from selling government stake in public sector banks and financial institutions. Rs 75,000 crore would come as CPSE disinvestment receipts.
Unveiling the Disinvestment/Strategic Disinvestment Policy, Sitharaman said four sectors — atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; and banking, insurance and financial services — would be strategic sectors.
In this, there will be a bare minimum presence of the public sector enterprises. The remaining CPSEs in the strategic sectors will be privatised or merged or subsidiarised with other CPSEs or closed. In non-strategic sectors, CPSEs will be privatised, otherwise shall be closed.
In her 2021-22 Budget speech, she said strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam Ltd, among others would be completed in 2021-22.
"Other than IDBI Bank, we propose to take up the privatisation of two Public Sector Banks and one General Insurance company in the year 2021-22. This would require legislative amendments and I propose to introduce the amendments in this session itself,"
she said.
Also, the legislative amendments required for launching the IPO of LIC would be brought in the ongoing session of Parliament.
To fast-track the disinvestment policy, NITI Aayog would work out on the next list of central public sector companies that would be taken up for strategic disinvestment.
Also, to similarly incentivise states to start disinvestment of their public sector companies, the government will work out an incentive package of central funds for states.
Besides, to ensure timely completion of closure of sick or loss-making CPSEs, a revised mechanism would be brought in, she
said.
"Idle assets will not contribute to Aatmanirbhar Bharat. The non-core assets largely consist of surplus land with government ministries/departments and Public Sector Enterprises.
"Monetising of land can either be by way of direct sale or concession or by similar means. This requires special abilities and for this purpose, I propose to use a Special Purpose Vehicle in the form of a company that would carry out this activity," Sitharaman added.
Unveiling the disinvestment/strategic disinvestment policy, she said the policy aims at minimising the presence of central public sector enterprises, including financial institutions and creating new investment space for the
private sector.