Air India, Bharat Petroleum Will Be Sold To Private Firms Before March, 2020; Govt Pushes More Disinvestment
Today sees a chunk of good news concerning the cautious slowdown slope of demand in the Indian economy. The Finance Minister Nirmala Sitharaman has announced the government’s plans to complete the sale of the ailing state-run companies Air India and Bharat Petroleum Corporation Limited (BPCL) by March 2020.
In an interview with the Times of India, Sitharaman expressed her confidence in the government’s focused disinvestment of the two state-run companies by the end of this financial year.
Govt to Complete the Sales of Air India and BPCL
It was no secret that these two state-run companies were going through heavy losses, concluding the government’s decision to sell them. In 2018, the government put up 76% of Air India for sale, which saw a weak demand from investors. The tepid response during the bidding process led to the govt to abort the airline’s sale.
This is the government’s second attempt to sell their stake in Air India. The privatisation of the national carrier and oil refiner is expected to help the government meet its divestment target of Rs 1 lakh crore in the current fiscal year, as India continues to tackle a steep demand slowdown.
This time the government is quite positive about achieving their feat. The ground realities will play out, Sitharaman told the publication. Sitharaman also told the paper that there was a “lot of interest” among investors for Air India, as seen during international road shows.
Disinvestment Gets More Push
Nirmala Sitharaman also said that the government is on the right track towards resolving the economic slowdown and added that several sectors are now coming out of distress. She said that the consumer sentiment was improving; adding that Rs 1.8 lakh crore in loans had been sought from banks at the outreach programme during the festival season.
The finance minister also said industry captains had helped improve their balance sheet and many of them were planning fresh investments.
The minister also talked about taxation. She expected Goods and Services Tax collections to bounce back citing improvement in some sectors and recent steps taken to provide a boost to the ailing economy.
She said that the Supreme Court judgement on Essar Steel had established constitutionality and legal strength of the IBC law and would have a huge impact on the balance sheets of banks in the next quarter.
While several ratings agencies have lowered India’s GDP growth forecast for the quarter ended September below 5%, Sitharaman exuded confidence that the economy will bounce back in due course.