2024-07-14 10:16:47
New Delhi: The Modi government had made an ambitious plan for the privatization of government companies. It was believed that it could be taken forward rapidly after forming the government for the third time. But now the government has indicated to retreat from this plan. A Reuters report quoted government sources as saying that the government is working on a plan to improve the profits of more than 200 government companies. This is an indication that the Modi government is preparing to put the privatization program on hold. The Modi government had announced an ambitious plan for the year 2021 to privatize a large part of the $ 600 billion public sector. Before the general elections in April-May, the government’s pace on this front had slowed down. In these elections, the BJP failed to get a majority on its own and it is dependent on NDA alliance partners to run the government. Sources said that Finance Minister Nirmala Sitharaman may announce a new plan in the budget to be presented on July 23. This includes selling a large part of the unused land with the companies and monetization of other assets. The aim is to raise $24 billion in the current financial year and reinvest it in companies. Five-year performance and production targets will be set for each company instead of short-term targets.
Three government companies will be closed! Decision can be taken today, know who all are in the list
what was the plan
The Finance Ministry did not respond to requests for comment. In the interim budget presented in February before the elections, the government did not give any figures on stake sale for the first time in more than a decade. An official said that the government is now focusing on increasing the intrinsic value of its companies by shifting its focus from indiscriminate asset sale. The government also wants to start succession planning in its majority companies. Along with this, there is also a proposal to train 230,000 managers in these companies to prepare them for senior roles.
According to the plan announced in the year 2021, two banks, one insurance company and government companies in the steel, energy and pharmaceutical sectors were to be sold. Also, loss-making companies were to be closed. But the government was successful in selling only debt-ridden Air India to the Tata Group. It had to withdraw the plan to sell some other companies. The government has sold only 3.5% stake in LIC. Also, shares have been sold in some other companies. Sunil Sinha, Chief Economist of India Ratings, said that due to lack of majority, it will be difficult for the Modi government to push forward the sale of government companies.