The Union Cabinet late on Wednesday green-flagged the much-awaited policy on the privatisation of public sector undertakings (PSUs), the details for which will be announced in the Union Budget on February 1. The policy was part of the Aatmanirbhar Bharat package announced by Sitharaman in May 2020 as a coherent policy where all sectors would be opened for private sector participation.
The government had then announced its intention to limit the presence of PSUs to one to four in strategic sectors, and to privatise, merge or bring the remaining companies under a holding company. Companies in non-strategic sectors would see the government exiting completely.
In the last Budget, finance minister Nirmala Sitharaman had announced the highest-ever divestment target of Rs 2.1 lakh crore, Rs 1.1 lakh crore more than the highest achieved divestment receipt of Rs 1 lakh crore in 2017-18. Sitharaman had announced the planned initial public offering (IPO) of public sector behemoth Life Insurance Corporation of India.
The cabinet had also cleared the privatisation of Bharat Petroleum, Container Corp and Shipping Corp in November 2019. These, along with Air India, were expected to be completed in the current financial year.
According to the initial draft of the policy floated by the Department of Investment and Public Asset Management, around 18 sectors were classified as strategic sectors, including power, fertilisers, telecom, defence, banking, and insurance. These have been categorised mining and exploration, manufacturing and processing, and services.
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