THE BIG PRIVATISATION PUSHBACK

By January this year, the Centre had achieved just five per cent of its Rs 1.75 lakh crore divestment target for FY22. What ails the privatisation process, and what’s the way out?

-  SHWWETA PUNJ

IN RECENT YEARS, disinvestment has been a major watchword for the Centre. Last year, its budget was in some senses even anchored on expected disinvestment revenue, with the government looking to earn Rs 1.75 lakh crore from the monetisation of PSUs (public sector undertakings) like Air India, BPCL (Bharat Petroleum Corporation Limited) and SCI (Shipping Corporation of India). However, as of December 2021, the government had met just about five per cent of that target, or Rs 9,240 crore. In her budget this year, Union finance minister Nirmala Sitharaman indirectly acknowledged the huge miss by scaling down the FY22 disinvestment revenue projection from Rs 1.75 lakh crore to Rs 78,000 crore and setting the 2022-23 target at just Rs 65,000 crore.

For several years, the Centre has faced a host of troubles in making good on its privatisation promises, be it a pushback from employee unions worried about their future or trouble generating investor interest. Many PSUs on the block also have complex, damaged balance sheets, making it difficult to value them accurately. Tuhin Kanta Pandey, secretary, DIPAM (Department of Investment and Public Asset Management), says the government is mindful of the challenges and has shifted focus from diluting PSU holdings to full privatisation. The sale of Air India to the Tata Group has been encouraging, though it brought the government only Rs 2,700 crore in cash. Pandey hopes to repeat this success.