Falling PSU disinvestment receipts as stark as higher govt capex for them

Disinvestment as a policy was launched in the early 1990s to bolster revenue and use the reduced government stake in PSUs to help enhance their autonomy

The Narendra Modi government’s engagement with public sector undertakings (PSU) has undergone a major change in the last 10 years. There are some obvious trends, and there are some that are not so obvious.

 

The rise and fall in receipts from disinvestment of government equity in central PSUs is one such obvious trend. It rose from 0.2 per cent of gross domestic product (GDP) in 2014-15 to a high of 0.6 per cent of GDP in 2017-18. But over the next few years, it fell steadily to just about 0.03 per cent of GDP in 2024-25. Importantly, the fall in