The Indian government will continue to maintain a presence in four key sectors, including telecommunications, and is not rushing to privatize everything, according to Finance Minister Nirmala Sitharaman. The government will retain a minimum presence at the holding company level in these strategic sectors, which also include atomic energy, space and defense; transport and telecommunications; and banking, insurance and financial services. Enterprises that are not large enough to function independently, or that are not sustainable or scalable, may be considered for privatization, merger with another public sector enterprise, or closure.
Sitharaman emphasized that the government’s strategy is not to sell everything, but to focus on strategic interests. For example, the government will continue to own a telecom company, which will be run professionally. She explained that smaller and unsustainable enterprises may be blended with larger, sustainable entities to create a larger enterprise that can function independently.
In the latest budget, the government announced plans to raise Rs 51,000 crore ($6.8 billion) by selling stakes in various state-run companies in the fiscal year 2023-24. This is marginally higher than the target for the current fiscal year, which ends on March 31, 2023. The government has missed its disinvestment target for the past four years. The process of disinvestment for several central public sector enterprises, such as IDBI Bank, Shipping Corporation of India, NMDC Steel, BEML, HLL Lifecare, Container Corporation of India, and Vizag Steel, has already begun, and the government hopes to complete these disinvestments next fiscal year to meet its target.
Asset monetization is also being encouraged to generate revenue from underutilized assets. Sitharaman explained that asset monetization does not mean selling or giving assets for free, but rather assessing their value and putting them to productive use.
Sitharaman expressed confidence in India’s growth prospects, citing a growing middle class with purchasing power, tech-driven public investment, and robust digital infrastructure. She also highlighted India’s rule of law, which ensures justice for citizens and businesses despite delays.
In terms of India’s attractiveness to foreign investors, Sitharaman noted that several G20 ministers have spoken about “friendshoring,” or sourcing products from countries with shared values. She also discussed India’s proposals for reforming multilateral institutions, including a recent proposal to set up an expert panel on how such institutions should respond to 21st-century challenges.
Finally, Sitharaman touched on climate finance, stating that there is a greater willingness to discuss the needs of developing countries. Overall, her remarks emphasized the government’s commitment to strategic interests and sustainable growth.
