Recently, Finance Minister (FM) of India Nirmala Sitharaman presented the budget for this fiscal year, declaring ambitious targets. She also mentioned that the government would honour its decision to privatise PSU (Public Sector Unit); however, the timing has to be decided.
“When is the time to disinvest any or several of these companies listed and cleared by the Cabinet has to be decided by the government.” She further added that post the COVID-19 pandemic, PSUs, including Air India and a steel plant in Odisha have been sold off. Cabinet decisions will have to be honoured.” Nirmala Sitharaman mentioned this at the post-budget conference.
Taken together with the disinvestment and dividend policy, the Union budget has pegged the total receipts of more than 1 lakh crore to be received in this fiscal year. Looking at the breakdown of the amount, the government has anticipated receiving Rs 50,000 crore from disinvestment and Rs 56,260 crore as dividends.
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In the last three years, the combined market cap of 81 listed PSUs, including banks and insurance companies, has grown by 225% due to higher government capex and better capital management. Also, the Indian government received dividends worth Rs 6,481 crore for the financial year 2023-24 from four public sector banks, including Canara Bank and Indian Bank.
Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM), shed more light on the centre’s strategy. He stated that the government would continue its “holistic approach” to stake sales in public sector enterprises, which would include a strategy for value creation and a calibrated approach for disinvestment and asset monetisation.
