New Delhi: Chief Economic Advisor (CEA) Krishnamurthy Subramanian has said that after a year marred by the COVID-19 pandemic that derailed the government's ambitious privatisation plan, FY2021-22 will be a very important year in the history of PSU privatisation in India. In an interview to Moneycontrol.com, the CEA said, "This could be a very big year. The COVID pandemic did affect it (disinvestment) because for several months, some of these processes had to be put on hold, and that is why it is actually spilled over into the current year. Overall, I think this year actually could be a very important year in the history of India's privatisation."
Commenting on the big disinvestment plans for FY2020-21 which have spilled over to FY2021-22 due to the delay induced by the COVID-19 pandemic, Subramanian said, "I think the coming fiscal year could be actually a very seminal year for actual privatisation with the expression of interest that has come in for both Air India and Bharat Petroleum Corporation (BPCL). Both of them will be big signposts in the actual implementation of the privatisation agenda. Air India has lagged for such a long while and stopping that bleeding is something actually that would be a very important signpost."
Subramanian said that the privatisation of a profitable company like BPCL will enable wealth creation and will be good for the economy. "At the same time, in case of a profitable company like BPCL, implementing the idea that government has no business being in business, except in strategic sectors, and the fact that privatisation actually does enable wealth creation, would be very important. Having these entities where there is no strategic interest in the private hands would be good for the economy," said the CEA.
The statement comes days before Finance Minister Nirmala Sitharaman is expected to present the Union Budget for 2021-22. Since none of the big disinvestment plans have materialised this fiscal, the government is likely to see them through in FY2021-22 and could announce a massive bump in the disinvestment target for the year. Sources who have spoken to PSU Watch have said that the disinvestment target for the next financial year may be pushed to Rs 3 lakh crore in the Budget.
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