Modi said it is not necessary or possible for the government to remain the owner of so many CPSEs
The government has set an ambitious disinvestment target of ₹1.75 trillion for FY22
Prime minister Narendra Modi on Wednesday announced investment opportunities worth ₹2.5 trillion in the national asset monetisation pipeline mentioned in the Budget through sale of around 100 assets of central public sector enterprises (CPSEs).
“Today, there are many underutilized and unutilized assets under the control of the government. We have set the target to monetize around 100 assets in oil, gas, port, airport and power sectors. This process will continue in future also. The government is moving ahead with the mantra of ‘monetise and modernize’," Modi said while addressing a webinar on privatization and asset monetization attended by investment bankers, sovereign and pension funds as well as domestic and international investors.
Modi said it is not necessary or possible for the government to remain owner of so many CPSEs and government should rather focus on public welfare and development. "That's why I say government has no business to remain in business," he added.
Admitting that government lacks the courage to make commercial decisions, Modi said government has many limitations in the decision making process. “Everybody remains afraid of innumerable accusations and legal tangles. That is why the thinking within the government has been to let things remain as they are," he added.
DIPAM secretary Tuhin Kant Pandey said the objective of the webinar is to jointly develop an effective implementation plan for the bold reforms for privatization and asset monetization.
Finance minister Nirmala Sitharaman unveiled a PSE policy providing a roadmap for disinvestment in all non-strategic and four strategic sectors. The government aims to keep “bare minimum" CPSEs in the four strategic sectors and privatise the rest of the CPSEs or close down the unviable ones. The four buckets of strategic sectors include atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; banking, insurance and financial services.
Modi said the FY22 budget has put forward a clear roadmap to put the economy on a high growth trajectory and the PSE policy announced in the Budget aims at right utilisation of public money. “There are many public sector enterprises which are loss making. Many of them need to be supported through tax payers’ money. The money on which poor and youth have the right is spent on these enterprises and because of this, the CPSEs also prove to be a burden on the economy," he added.
Prime minister said government will ensure transparency, competition, stable policies and processes for the medium term strategic disinvestment policy unveiled in the Budget. “For this along with a detailed roadmap, proper price discovery and stakeholder mapping, we have to learn from the global best practices. We have to keep in mind that the decisions that are taken benefit the public as well as help in development of that sector," he added.
Government has set an ambitious disinvestment target of ₹1.75 trillion for FY22 after failing to complete any big-ticket privatization in FY21 due to the disruptions caused by the covid pandemic. For FY21, it has pared down its target to ₹32,000 crore from ₹2.1 trillion estimated in the Budget.