Finance Minister Nirmala Sitharaman recently signaled a transformative shift in India's economic policy, suggesting that private companies may soon have the opportunity to invest in all public sectors.
In an interview with The Economic Times, Sitharaman stated, "There is no sector that is entirely reserved only for the public sector. That policy was part of the Finance Bill 2021 and has the cabinet's approval. I abide by it."
Sitharaman emphasised that the policy remains aligned with the 2021 budget statement, which opened all sectors to private investment. She also noted that while disinvestment wasn't highlighted in the latest budget, asset monetization "can be better." The government has maintained a disinvestment target of Rs 50,000 crore for the fiscal year 2024-25.
The government and Life Insurance Corporation (LIC) plan to sell a 60.7 per cent, potentially realizing around Rs 29,000 crore.
Recent challenges in the divestment process have led the Modi government to possibly reconsider its privatization agenda. Instead, the focus may shift towards restructuring state-run firms. Despite earlier plans to privatize several state-run companies, including two banks and one insurance company, only the sale of Air India to the Tata Group has been completed. The interim budget did not disclose figures on stake sales, a departure from previous practices.
In her 2021-22 budget, Sitharaman announced the privatization of two state-run banks and one insurance company. However, progress has been slow, with some plans reversed and only a minor stake in LIC sold.