Divestment agenda: FM says target is ₹2.10 lakh crore this fiscal

India’s disinvestment target is ₹2.10 lakh crore for current fiscal but so far it has managed around ₹6,100 crore, and on Monday (November 23) Finance Minister Nirmala Sitharaman said the financial sector is being professionalised and the government will continue with disinvestment agenda.

Of the ₹2.1 trillion disinvestment target, ₹1.20 lakh crore is to come from central public sector enterprises (CPSE) stake sale and ₹90,000 crore from stake sale in public sector banks and financial institutions.

“Momentum of reforms shall continue. Several more active reform-related steps are taken up. The financial sector is professionalised. Disinvestment agenda continues. We shall go with greater momentum in getting privatisation— that which has been cleared by the cabinet – to go forward,” Sitharaman said while speaking at a virtual conference organised by industry chamber Confederation of Indian Industry (CII) about multinational companies operating in India.

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Sitharaman said the government will make sure that there is greater momentum in bringing out the new privatisation policy for public sector units.

The finance minister had in May announced that there will be a maximum of four public sector companies in strategic sectors, while state-owned firms in other segments will eventually be privatised.

This will be part of a new coherent Public Sector Enterprises Policy to be formulated to push reforms in CPSEs, she had said while announcing the fifth and last tranche of over ₹20 lakh crore “Atmanirbhar Bharat Abhiyan” package.

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“We have identified several assets for monetisation including gas pipelines, power lines, highways, ports, airports,” said Niti Aayog CEO Amitabh Kant, who spoke earlier at the conference.

On Monday, it was announced that the Department of Investment and Public Asset Management (DIPAM) is scouting for a consultant to assist it in the minority and strategic stake sales in banks and insurance companies.

The consultant will be appointed for one year, which could be extended by 2 more years, and would be required to formulate proposals regarding issues to be taken up with regulatory or other agencies for the smooth working of DIPAM.

Sitharaman assured the industry that the momentum of economic reforms will continue to make India a hotspot of global investment.

India has turned the crisis created by COVID-19 pandemic into an opportunity to push the economic reforms, which remained pending for decades, she said.

“Even at the time (of) COVID pandemic, the Prime Minister has not lost an opportunity to take deep reforms to undertake those kinds of reforms which have not seen the light of the day over the decades. The momentum for reform shall continue. Several more active reform-related steps are being taken up,” Sitharaman said.

The Niti Aayog CEO said that foreign direct investment (FDI) in India increased to $74 billion in 2019-20 from $36 billion in 2013-14 despite challenges in the global economic environment. Noting that infrastructure will be a key driver of growth, Kant said through the National Infrastructure Pipeline (NIP) which envisages $1.5 lakh crore of investments, 21% of those will come from the private sector.

(With inputs from PTI)