Cabinet decisions on PSU disinvestments and privatisation to be honoured, says FM Sitharaman

Finance minister Nirmala Sitharaman on Tuesday said that decisions on privatisation or disinvestment in public sector undertakings taken by the Cabinet will be honoured.
 
“Privatisation or disinvestment as decided by the Cabinet is a Cabinet decision, it has to be honoured. But the timing is something which the government will have to choose,” the minister said in a post Budget conference while responding to a question on whether privatisation continues to be a part of the government’s agenda.
 
“When is the time to disinvest any or several of these companies listed and cleared by the Cabinet has to be decided by the government,” she noted, adding that post the Covid-19 pandemic PSUs including Air India and a steel plant in Odisha have been sold off. Cabinet decisions will have to be honoured,” she underlined.
 
However, the Centre will continue its “holistic approach” to stake sales in public sector enterprises, which would include a strategy for value creation and a calibrated approach for disinvestment and asset monetisation, said Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management.
 
“Our holistic strategy for value creation has a calibrated disinvestment. There are listings and market divestments. The fundamental performance of CPSEs, their capex, consistent dividend policy will be taken into account,” Pandey underlined.
 
Taken together, the Union Budget has pegged receipts from disinvestment and PSU dividends at Rs 2 lakh crore this fiscal, he said. The Union Budget has retained the target for miscellaneous capital receipts or disinvestment receipts at Rs 50,000 crore for FY25, which is in line with the Rs 51,000 crore in the Budget Estimates for FY24. However, it was reduced to Rs 30,000 crore in the Revised estimates.
 
The target for dividends from PSUs has been hiked to Rs 56,260 crore in FY25 from the Budget estimate of Rs 43,000 crore in FY24, which was later revised upwards to Rs 50,000 crore.
 
Investors have been awaiting clarity on the government’s stance on disinvestment in its third term and whether coalition politics would mean that stake sales would slow down.