The government is not in a “crazy rush” to sell everything and will continue to have a presence in four strategic sectors, including telecommunications, Finance Minister Nirmala Sitharaman said on Saturday.
In strategic sectors, a minimal presence of existing public sector business enterprises at the holding company level will remain under government control. Remaining companies in a strategic sector will be considered for privatization or merger with another PSE or for closure.
Speaking at the Raisina Dialogue, the minister said the country will have professionally managed government-owned companies in four broad strategic sectors.
According to the PES Policy, the four main strategic sectors are: atomic energy, space and defense; transportation and telecommunications; energy, oil, coal and other minerals; and Banking, Insurance and Financial Services.
Politics, he added, “is not crazy to run out and sell everything… nor is it to say that the government is going to run the business of producing pins to harvest for everything. So, where the government does not have to be, it won.” . But where it should be due to strategic interests, it will be there, like telecommunications, for example.
“There will be a telecommunications company that will be owned by the government and will be professionally run.”
Explaining the minimal government presence in those core sectors, he said: “We mean that institutions that are big enough to function on their own will be there, but if there are others that are very small or unsustainable or not scalable, if there are one possibility, we’ll try to combine them to make it a bigger unit, a sustainable unit, a unit that can take care of its needs on its own.”
The government will combine them and create a larger entity that can stay there, he said.
Sitharaman in the latest Budget announced that the government will raise Rs 51,000 crore through the sale of stakes in various state-owned companies in fiscal year 24. This is marginally higher than the current year ending 31 March 2023.
In the latest budget, the government intended to raise Rs 65 000 crore through divestments, which was later revised to Rs 50 000 crore. The government is currently trying to work on the privatization of several core public sector companies such as IDBI Bank, Shipping Corporation of India, NMDC Steel, BEML, HLL Lifecare, Container Corporation of India and Vizag Steel.
The divestment process for these companies has already started and is at different levels and is expected to be completed in the next fiscal year if the target of Rs 51,000 crore is met.
The government has not reached its divestment target for the past four years.
On the monetization of assets, Sitharaman said that assets that do not optimally generate income are being encouraged to be used to generate profit for the government or its entities.
Monetization does not mean selling or giving away assets for free, but a certain value being assessed and consequently put to productive use, he said, adding that asset monetization would continue.
Asked what gives her confidence that India’s growth would stay intact, the finance minister said: “We have the right mix of things that matter for a growing economy: a middle class, a captive market with purchasing power , technology-driven public investment and product development”. and digital infrastructure.
Furthermore, he said, India has a rule of law that guarantees justice to its citizens and businesses despite the delays.
Speaking of India’s appeal, he said, there are several G20 ministers who have been talking about “friendshoring” (sourcing products from countries with shared values).
India has been talking about how multilateral institutions need reforms and at the recent G20 meeting, India proposed establishing a panel of experts on how multilateral development institutions should respond to the challenges of the 21st century, he said.
On climate finance, the finance minister said there is a greater willingness to discuss the global south and its needs.
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