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Finance Minister Nirmala Sitharaman today said the government will privatise public sector units or public sector enterprises (PSEs) in non-strategic sectors. A list of strategic sectors will also be announced in which only one to four public sector enterprises will remain, the finance minister said, as part of a slew of measures to kickstart the economy.

In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed.

To minimize wasteful administrative costs, number of PSEs in strategic sectors will be ordinarily be only one to four. Others will be privatised/merged or brought under under holding companies.

The finance minister said there is a need for coherent policy where all sectors are open to the private sector while public sector enterprises will play an important role in defined areas.

Sitharaman also today said no fresh insolvency cases would be initiated for up to a year, in a move to avoid a wave of bankruptcies from companies hit by the coronavirus outbreak.

Debt incurred by companies due to the coronavirus outbreak would not be considered a default under the country's bankruptcy code, she added.

Bankruptcies in India are expected to climb as the coronavirus outbreak hits distressed companies harder in Asia’s third-largest economy. India has been under a strict lockdown since March 25 with some easing on April 20 and then May 4.

(With Agency Inputs)

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