Losing Steam?

The government's disinvestment programme, designed to free it from owning and running businesses, appears to have been put on the backburner

- Ashish Sinha

FEBRUARY 24, 2021. Speaking at a webinar on privatisation by the Department of Investment and Public Asset Management (DIPAM), Prime Minister Narendra Modi declared that the government has no business to be in business and his administration was committed to privatising all PSUs barring the bare minimum in four strategic sectors. “It is government’s duty to support enterprises and businesses. But it is not essential that it should own and run enterprises,” he said.

Adding that fiscal support to sick and loss-making PSUs using taxpayers’ money puts burden on the economy, the Prime Minister said there many underutilised and untilised assets in the public sector and 100 of these would be monetised to garner Rs 2.5 lakh crore.

He was speaking a few weeks after the budget, and, perhaps trying to justify the sale of public assets so far. For two consecutive years—FY18 and FY19—the government raised nearly Rs 2 lakh crore from disinvestment against a stated target of Rs 1.53 lakh crore. Then things changed. The global pandemic came amid already sluggish economic conditions of FY20. And then came the Russia-Ukraine conflict.

Lower Targets

Fast forward to Budget 2023-24. For the fourth year in a row the central government has failed to meet its own disinvestment targets. This time, the finance minister refrained from spelling out any targets for FY24. For FY23, the government managed to collect only Rs 31,100 crore through minority stake sale in state-owned PSUs, out of the Rs 65,000 crore disinvestment target kept for this fiscal. Therefore, for 2023-24, the budget has pegged disinvestment revenue at Rs 51,000 crore against Rs 65,000 crore announced for FY23.