Cabinet likely to take up policy for PSU privatisation this month

The Cabinet is likely to take up this month the much-awaited policy for privatisation of public sector undertakings (PSUs), which will lay the road map for reducing the number of government-owned entities in strategic sectors.

The policy is likely to be taken up by the Cabinet before the Union Budget is presented, and will subsequently be announced, a senior government official said. 

The Budget is likely to be presented on February 1.

The Public Sector Enterprises policy would include broad contours of the government’s plans for privatisation.

It has been finalised by the Department of Investment and Public Asset Management, and the Cabinet Secretariat will soon list it as an agenda item for the Cabinet Committee on Economic Affairs to consider.

Around 18 sectors are expected to be classified as strategic, including power, fertilisers, telecom, defence, banking and insurance. These have been categorised under mining and exploration, manufacturing and processing, and services.

In these sectors, the government would retain only one to four PSUs, and the rest would be privatised, merged or brought under a holding company. The sectors that would be classified as non-strategic would have no government-owned companies. Privatisation of companies in non-strategic sectors is likely to be done on a case-by-case basis, said the official quoted above.

Having a coherent policy where all sectors would be opened for private sector participation was a part of the Aatmanirbhar Bharat package announced by Finance Minister Nirmala Sitharaman in May last year.

In the current fiscal year, the government plans to privatise Bharat Petroleum Corporation, Shipping Corporation of India, Container Corporation of India and the national carrier, Air India. A few of these may happen only next year.

The government’s divestment target for this fiscal year is Rs 2.1 trillion, with Rs 12,778 crore collected as divestment receipts so far.