Govt Determined To Sell 23 Big PSUs To Private Firms & Earn Rs 2 Lakh Crore This Year
Last week, we covered a very detailed story on privatisation of many PSUs to be timed soon, with private players tapping in every sector.
As per the government, the privatisation drive will bring in a multitude of investment opportunities for investors looking to enter different untapped sectors like:
- enter oil and gas
- minerals and
- insurance sectors.
The government is now working on completing the process of selling stakes of about 23 public sector cos, whose divestment has already been cleared by the Cabinet, as informed by the FM Nirmala Sitharaman.
Insight on the Matter
In a conversation with Sunil Kant Munjal, the Chairman of Hero Enterprise, Sitharaman said the government had announced opening up of all sectors for private participation, as a part of the Aatmanirbhar Bharat package.
She also confirmed that she is looking forward to meet small finance firms and non-banking finance companies (NBFCs) for reviewing the credit extended by them to businesses.
“The final call as to which are the sectors which are going to be called ‘strategic’ is not made yet, that has to be announced and I can’t preempt what announcement is likely to come.
But in those sectors which we are going to call strategic, the private will obviously be allowed to come in but the public sectors will be limited to a maximum of four units.”
The government plans to cut down the number of companies and organizations in each sector to not more than 1-4 companies.
About the Disinvestment Plan
Sitharaman said that since 22-23 PSUs have already been given the nod by the Cabinet for disinvestment, they now intent to sell stakes in at least these cleared companies, only when they fetch a right price for the disinvestment.
For the fiscal 2020-21, the government has targeted a disinvestment amount of Rs 2.10 lakh crore.
Of this amount, Rs 1.20 lakh crore will come from disinvestment of public sector undertakings, while the remaining Rs 90,000 crore will come from stake sale in financial institutions.
With regard to extending credit to the industry, Sitharaman said under the Emergency Credit Line Guarantee Scheme (ECLGS), micro, small and medium enterprises (MSMEs) can avail loans.
The total sanctioned amount under the 100% Emergency Credit Line Guarantee Scheme by public and private sector banks stands at Rs 1,30,491.79 crore, as of July 23, 2020.
Out of this amount, Rs 82,065.01 crore has already been disbursed.