Privatisation U-Turn

In a significant departure from its earlier policy focus, the Union government is stepping back from aggressive privatisation efforts and is instead investing heavily in reviving ailing state-run enterprises.

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This shift, marked by a substantial allocation of funds to modernise and sustain public sector companies, raises questions about the long-term implications for economic growth and fiscal health. The government's decision to inject Rs 2,000-3,000 crore into the helicopter operator Pawan Hans for fleet modernisation reflects the seriousness of this policy pivot. Similarly, Rs 11,000 crore has been allocated for the revival of Rashtriya Ispat Nigam Ltd, and Rs 6,900 crore has been earmarked for repaying bonds of the struggling telecom company, MTNL. These figures underline the scale of financial support being extended to entities that have struggled for years to remain viable in a competitive market. This policy reversal comes despite the ambitious privatisation drive announced a few years ago, which aimed to reduce the role of the state in non-strategic sectors