Thu. Nov 17th, 2022

The Modi government is confident of privatising national carrier Air India and oil marketing behemoth Bharat Petroleum in the fiscal year 2021-22, and will at least complete the work of due diligence and financial bids for other candidates like Shipping Corp, BEML, Pawan Hans, and Nilanchal Ispat Nigam, said Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management.
Speaking at the annual session of the industry body Confederation of Indian Industries on August 11, Pandey said the initial public offering of LIC, which could be the largest market debut in India, will also be done this year.
“After 17 years the country will finally see privatization, the last one happened in 2003-04,” Pandey said.
“We intend to do Air India this year, BPCL privatization we want to complete this year. Shipping Corp, BEML, Pawan Hans and NINL, these are the transactions where we have substantial interest from bidders and we are now completing that second stage of due diligence and bidding, which we hope to complete this FY,” he said.
The 2021-22 Union Budget has set a divestment target of Rs 1.75 lakh crore, most of which is expected to come from privatisation and the LIC IPO. Finance Minister Sitharaman had also announced that two state-owned banks and a general insurance company will be privatized this year.
However, as Moneycontrol had reported earlier, given that the long, and hitherto untried process of privatising state-owned financial companies has just begun, the centre will look to meet the target by pushing forward with existing plans like Air India, BPCL, Pawan Hans, NINL, BEML and Shipping Corp.
Pandey also said the process of the sale of IDBI Bank to a private bank has begun with cabinet clearance, while the expression of interest for Container Corp is expected soon.
‘Clear Policy for PSUs’
Speaking at the CII event, Pandey admitted that the Covid-19 pandemic had derailed the centre’s privatization plans last fiscal and in the first quarter of this fiscal year, but now things were getting back on track.
“Covid had hit us badly. The due diligence is very rigorous when it comes to strategic sales, and that process was impacted because of travel restrictions,” he said.
“We have come out with a clear policy for public sector enterprises, wherein we have four broad strategic sectors where the bare minimum number of PSEs will be retained, and the others will either be privatized or consolidated or they will be closed,” Pandey said.
The strategic sectors identified include atomic energy, space and defence; transport and telecom; power, petroleum, coal and other minerals; and banking, insurance and financial services.
Pandey also said the government has spoken openly for the first time about closing PSUs, where in case they cannot be divested, there will be closure.
“There is a very big privatization agenda and that would mean that apart from NCLT, there will be a lot of assets on offer which will come from the public sector,” he said.
“The PSE policy clearly says that let government not be in business. It is a matter of time before we will exit from many sectors. This is a 1991 moment for the public sector,” Pandey said.
On the Rs 6 lakh crore asset monetisation pipeline, Pandey said, after the success of the Infrastructure Investment Trust (INViT) of power assets, the next big investment opportunity would be the INVIT of GAIL’s gas pipeline.