The government should focus on privatisation of state-owned companies instead of chasing high divestment targets, said DIPAM Secretary Tuhin Kanta Pandey, according to Reuters. He added that high targets lead to a perception that the government will sell minority stakes in public sector undertaking.
The central government has a disinvestment target of Rs 65,000 crore for the current financial year 2022-23, according to Union Budget documents. For the financial year 2021-22, it had set a disinvestment target of Rs 1.75 lakh crore in the last year’s budget. Out of this only Rs 13,500 crore could be raised from the sale of stakes in public sector undertakings. In the current financial year so far, the government has raised Rs 24,544 crore.
In the previous year’s Budget Speech 2021, Finance Minister Nirmala Sitharaman had said, “We have kept four areas that are strategic where bare minimum CPSEs [central public sector enterprises] will be maintained and rest privatised.”
“We should actually have moderate targets and more focus should be on privatising,” Pandey said, according to Reuters.
Recently, the government scrapped the privatisation of SAIL’s Bhadravathi steel plant due to insufficient bidder interest. The Expression of Interest (EoI) for selling SAIL’s 100 per cent stake in Visvesvaraya Iron and Steel Plant (VISP), Bhadravathi in Karnataka, was invited on July 2019.
The Department of Investment and Public Asset Management (DIPAM) said multiple EoIs had been received and qualified bidders had conducted due diligence. “However, due to insufficient bidder interest in proceeding further with the transaction, Government of India, with the approval of Alternative Mechanism (Empowered Group of Ministers) has decided to annul the EoI and thereby terminating the present transaction,” DIPAM said recently.
In September, Union Petroleum and Natural Gas Minister Hardeep Singh Puri also said the divestment of Bharat Petroleum Corporation Ltd (BPCL) is not on the table as of now. Minister of State for Finance Bhagwat Kishanrao Karad also said a majority of qualified interested parties have expressed inability to continue in the current process of disinvestment of BPCL.
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