19 January, 2021

D Company And India Inc.

Govt goes for Rs 1.05 lakh crore disinvestment target. Will it really help ailing PSUs like Air India?

D Company And India Inc.

It’s the D-word that has obsessed the Indian government for the past three decades. But none made disinvestment—the sale of government stake in public sector units (PSUs)—as much a priority as Prime Minister Narendra Modi in his two terms since coming to power for the first time in 2014. Almost perfecting the art of monetising PSU assets, the first Modi government raised Rs 2.8 lakh crore from disinvestment proceeds. For the current fiscal, his government has set the bar even higher, going for an ambitious target of over Rs 1.05 lakh crore in 2019-2020. The government has identified more than two dozen central PSUs for disinvestment, including the debt-ridden Air India which found no buyers last year.

Experts and economists, however, say that the disinvestment process has neither helped PSUs whose shares were sold, nor the government which wished to get out of the business of being in business, or the investors, both institutional and smaller ones. In most cases, they point out, various governments sold stakes in PSUs to other PSUs. It became a mechanism...



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