• The PSU disinvestment list will be reviewed by the DIPAM first followed by the Core Group of Secretaries on Disinvestment and the Alternative Mechanism on disinvestment

• The government has tasked Niti Aayog with recommending PSUs that can be privatised

New Delhi: Setting the ball rolling on the next phase of PSU disinvestment, government think tank Niti Aayog has submitted a list of 12 public sector undertakings (PSUs) which may be taken up for disinvestment. According to sources, the list primarily comprises of public sector banks and insurance companies. The PSU disinvestment list will be reviewed by the Department of Investment and Public Asset Management (DIPAM) first followed by the Core Group of Secretaries on Disinvestment (CGD) and the Alternative Mechanism (AM) on disinvestment. 

After the list is reviewed and approved by the AM, the DIPAM will then move a proposal to get in-principle approval from the CCEA (Cabinet Committee on Economic Affairs) case by case.

FM announced privatisation of 2 PSBs, 1 GIC in Budget speech

The news follows the announcement made by Finance Minister Nirmala Sitharaman in her Budget speech for 2021-22, where she said that the government will privatise two public sector banks (PSBs) and one general insurance company (GIC). The government has clearly declared its intention to exit management control and trim the number of PSUs in India. The Centre plans to retain a bare minimum number of PSUs in strategic sectors like, power, petroleum, coal, and other minerals, atomic energy, space, defence, banking, insurance, and financial services, transport and telecommunications. The remaining PSUs are to be either privatised, merged or closed.
The government has tasked Niti Aayog with recommending PSUs that can be privatised. For FY22, the government has set a target of raising Rs 1.75 lakh crore from PSU disinvestment.

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The backdrop

At a recent webinar held on February 24, Prime Minister Narendra Modi had asserted that public sector undertakings (PSUs) in India do not hold the same kind of relevance as they did at the time they were started and had said that the government is going ahead with the mantra of 'Privatise, Monetise & Modernise.' He had said that it is the responsibility of the government to give full support to the enterprises of the country but at the same time, the government has no business to be in business.

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