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PM signals PSU assets sale

PM Modi signals PSU assets to sale

Modi said it is not necessary or possible for the government to remain the owner of many CPSEs, and the government should instead focus on public welfare and development

Prime Minister Narendra Modi on Wednesday announced investment opportunities worth 2.5 trillion in the national asset monetization pipeline outlined in the Union budget, through the 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 the oil, gas, port, airport, and power sectors. This process will continue in the future also. The government is moving ahead with the mantra of ‘monetize and modernize’,” Modi said at 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 the owner of many CPSEs, and the government should instead focus on public welfare and development. “That’s why I say the government has no business to remain in business,” he said.

The government faces many limitations in the decision-making process, Modi admitted. “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.

Tuhin Kanta Pandey, secretary, department of investment and public asset management, said the objective of the webinar was to jointly develop an effective implementation plan to undertake bold reforms for privatization and asset monetization.

Finance minister Nirmala Sitharaman unveiled a PSE policy providing a road map for disinvestment in all non-strategic and four strategic sectors. She said the government aims to keep the “bare minimum” CPSEs in four strategic sectors and privatize the rest or close down unviable ones. The four buckets of strategic sectors are atomic energy, space and defense; transport and telecommunications; power, petroleum, coal and other minerals; banking, insurance, and financial services.

Modi said the FY22 budget has put forward a clear road map to put the economy on a high-growth trajectory and the PSE policy aims at the right utilization of public money. “There are many PSE which are loss-making. Many of them need to be supported through taxpayers’ 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,” he added.

Modi said the 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 road map, proper price discovery, and stakeholder mapping, we have to learn from global best practices. We have to keep in mind that decisions that are taken benefit the public as well as help in the development of that sector,” he added.

The government has set a disinvestment target of 1.75 trillion for FY22 after failing to complete any big-ticket privatization in FY21 due to the disruptions caused by covid. For FY21, it has pared its target to 32,000 crores from 2.1 trillion.


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