govt-remains-firm-on-privatisation-as-fm-sitharaman-clarifies

The Indian government remains firm on its commitment to disinvestment and privatisation, as clarified by Finance Minister Nirmala Sitharaman after presenting the Union Budget.

 

Addressing speculation regarding a possible rethink, she emphasised that privatisation is a decision made by the cabinet and will proceed as planned.

 

Sitharaman highlighted that the government has worked extensively on valuations, ensuring that companies identified for disinvestment are professionally managed and financially strengthened.

 

She pointed out that several state-owned enterprises have witnessed significant improvements in valuation, with listed entities performing well in the stock market.

 

One of the key privatisation initiatives in focus is the sale of a majority stake in IDBI Bank. The government, holding 45.48 pc of the lender, along with the Life Insurance Corporation of India, which owns 49.24 pc, plans to divest 60.7 pc of the bank’s equity. 

 

This process was originally announced in 2022. Sitharaman stated that the sale should materialise soon, with interested buyers now being granted confidential access to conduct due diligence. This follows a year-long evaluation of potential bidders by the government.

 

Alongside privatisation, asset monetisation is a crucial part of the government's economic strategy. The Union Budget 2025 introduced the second phase of the asset monetisation programme for 2025-30, with an ambitious target of generating ₹10 lakh cr.

 

The funds raised will be reinvested in infrastructure projects, furthering economic growth and development.

 

This new phase builds upon the success of the first asset monetisation plan announced in 2021, where ₹6 lakh cr worth of government-owned assets were earmarked for monetisation. The government had initially targeted ₹2.5 lakh cr for the first two years and successfully achieved ₹2.3 lakh cr.

 

In the following year, a goal of Rs 1.8 lakh crore was set, with the actual achievement reaching ₹1.56 lakh cr.

 

Sitharaman reaffirmed that asset monetisation is not just about selling state-owned assets but about unlocking capital to fund new projects. The government is also refining regulatory and fiscal measures to ensure the smooth implementation of the initiative.