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Budget expectations: No change likely in privatization plan of CPSEs next fiscal

Considering the time taken for strategic sale or privatization, which is length, chances are that the high-budgeted disinvestment target may not be achievable. (HT)Premium
Considering the time taken for strategic sale or privatization, which is length, chances are that the high-budgeted disinvestment target may not be achievable. (HT)

  • If there is no change in the privatization plan during this budget 2023, then that means the government will continue with the already planned strategic sales of companies such as Shipping Corporation of India, NMDC Steel, BEML, Container Corp, and the big ticket IDBI Bank.

Finance Minstry is likely to stick to the already-announced and planned privatization of Central Public Sector Enterprises (CPSEs) in the next fiscal 2023-24. Also, chances of a new addition to the list of CPSEs in the upcoming Union Budget are also seen as unlikely.

An official told PTI that the lan is to move ahead with the strategic sale of the companies for which Cabinet approval is already in place.

If there is no change in the privatization plan during this budget 2023, then that means the government will continue with the already planned strategic sales of companies such as Shipping Corporation of India, NMDC Steel, BEML, HLL Lifecare, Container Corporation of India and RINL or Vizag Steel, and the big ticket IDBI Bank.

Also, considering the time taken for strategic sale or privatization, which is length, chances are that the high-budgeted disinvestment target may not be achievable.

PTI reported that Nangia Andersen LLP, Partner- Government and Public Sector Advisory, Suraj Nangia said, "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".

Nangia also added, a multi-year strategic plan for privatization can be formulated to ensure there is a concrete timeline and a well-designed sequencing and strategy for privatization.

Finance Minister Nirmala Sitharaman will announce the Budget 2023 on February 1st, which comes ahead of the elections next year.

In Budget 2022, the government had set a disinvestment target of 65,000 crore for fiscal year 2022-23. As per the latest data of DIPAM, disinvestment to the tune of 31,106.64 crore has so far been completed in the current fiscal year -- which is nearly 48% of the budgeted target.

Some of the major disinvestments so far in FY23 are --- 20,516.12 crore stake sale through IPO in largest insurer, LIC, 3,839 crore worth stake sale in Axis Bank via SUUTI, OFS worth 3,026.23 crore and 2,723.73 crore in ONGC and IRCTC.

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