Telecom may be first strategic sector to be picked up for privatisation

According to the centre's PSE policy announced in 2021, the government aims to maintain 'bare minimum' presence in strategic sectors that include energy, telecom, power, banks, and minerals.

Telecommunications (telecom) may be the first strategic sector to be shortlisted for privatisation under the new Public Sector Enterprises (PSE) Policy, 2021, since a series of meetings have been held to discuss recommendations made by the NITI Aayog, an official told Business Standard. 

Even as the Centre was considering launching the initial public offering of the Telecommunications Consultants India (TCIL), it may now consider privatisating the public sector undertaking (PSU) involved in consultancy services and working closely with the private sector, said another official.

TCIL provides consultancy services to domestic and global organisations, and has tie-ups with private players.

The proposal is still being discussed as the Centre looks at moving towards its stated policy of having minimum presence in strategic sectors.

Even as Finance Minister Nirmala Sitharaman had announced in last year’s Budget that two public sector banks (PSBs) and an insurance company would be privatised to show the government’s commitment towards its new privatisation policy, the Centre is yet to initiate changes to the legislation to enable the privatisation of PSBs.

Privatisation of a PSU insurer is yet to be approved by the Cabinet Committee on Economic Affairs before the Department of Investment and Public Asset Management can kick-start the process. This may lead to a situation of the telecom company getting privatised first, if the current discussions come to fruition. 

According to the Centre’s PSE policy announced in 2021, the government aims at maintaining a ‘bare minimum’ presence in strategic sectors, including energy, telecom, power, banking, and mineral.

The Committee of Group of Officers, chaired by Aayog chief executive officer, has met at least thrice to consider the divestment of PSUs under the Department of Telecommunications (DoT). A sectoral note is learnt to have been prepared by the Aayog.

The PSUs that come under DoT are Bharat Sanchar Nigam, Mahanagar Telephone Nigam, Bharat Broadband Network, TCIL, ITI, Centre for Development of Telematics, and Telecommunication Engineering Centre.

The group of officials has also considered the privatisation or closure of PSUs under the Ministry of Housing and Urban Affairs (MoHUA), Ministry of Health and Family Welfare (MoHFW), Department of Pharmaceuticals (DoP), and the Department of Fertilizers.

PSUs that fall under MoHFW are Goa Antibiotics & Pharmaceuticals, HLL Lifecare, HLL Infra Tech Services, and HLL Biotech.

Hindustan Prefab, NBCC (India), NBCC Engineering & Consultancy, NBCC Services, HSCC (India), Hindustan Steelworks Construction, and Housing and Urban Development Corporation fall under MoHUA.

DoP has Hindustan Antibiotics, Karnataka Antibiotics & Pharmaceuticals, and Rajasthan Drugs & Pharmaceuticals under its administration. 

Earlier this month, Business Standard had reported that the government is learnt to be considering Rashtriya Chemicals and Fertilizers, National Fertilizers, Fertilisers and Chemicals Travancore, and Fertilizer Corporation of India, among other fertiliser PSUs, for privatisation.

The process of privatising Projects & Development India is already under way and the Centre has received response from interested parties.