STATE TIMES NEWS
New Delhi: Prime Minister Narendra Modi on Wednesday said the government has no business to be in business and his administration is committed to privatising all PSUs barring the bare minimum in four strategic sectors.
“It is government’s duty to support enterprises and businesses. But it is not essential that it should own and run enterprises,” he said.
Modi also said the Centre’s policy is to either monetise or modernise public sector enterprises, with the intent that the government has “no business to be in business”.
Speaking at a webinar on privatisation by the Department of Investment and Public Asset Management (DIPAM), Modi said the Budget has given a clear roadmap to take India to a high growth trajectory.
Fiscal support to sick PSUs puts burden on the economy and public sector units should not be run just because of legacy, the Prime Minister said, adding many PSUs are loss-making and supported by taxpayers’ money.
The government has many underutilised and untilised assets and 100 assets would be monetised to garner Rs 2.5 lakh crore, Modi added.
The Prime Minister said the private sector brings in investment, global best practices, top-quality managers, changes in management and modernisation, he said, adding the money generated from the stake sales will be routed to public welfare schemes in areas like water and sanitation, education and healthcare.
Modi also said to speed up the disinvestment process, an empowered group of secretaries has been set up to settle investor issues.
The government has to focus on development and the public sector and whenever it engages in business, it leads to losses, he said, adding several loss-making PSUs are supported by taxpayers’ money which otherwise should have gone into welfare schemes.
As much as Rs 1.75 lakh crore is being targeted from the sale of government stake in firms such as India’s second-biggest oil firm BPCL, national carrier Air India, largest shipping line Shipping Corporation of India Ltd, helicopter services company Pawan Hans, IDBI Bank and Container Corporation of India in the next fiscal year beginning April 1.
This, along with an initial public offering of Life Insurance Corporation (LIC) and sale of two public sector banks and one general insurance company, will be the largest disinvestment drive ever.
The government has already received “multiple expressions of interest” for privatisation of Air India, BPCL and Pawan Hans.
The Prime Minister further said the current reforms seek to ensure that public funds are used efficiently.
Stating that PSUs are valuable assets that have helped the country in the past and have huge potential in future, he said best global practices for proper price discovery and stakeholder mapping will be followed for the privatisation drive.
“Implementation is also important. To ensure transparency and competition, our processes should be right.
“To ensure this, a clear roadmap for proper price discovery and stakeholder mapping has to be followed. We will have to learn from the best global practices. We will have to see that the decision that is being taken helps in the growth of that sector along with public welfare,” he said.
Modi, who has in recent speeches underscored the importance of the private sector in building the economy, said the Budget for the fiscal year beginning April 1 has provided a clear roadmap for putting India on a high-growth trajectory again with a focus on private sector partnership.
The private sector’s role is crucial in not just privatisation but also the Rs 111 lakh crore National Infrastructure Pipeline created to pull the economy out of the pandemic-induced slump, he emphasised.
The Prime Minister said state-owned firms were founded decades back when the Indian economy’s needs and national priorities were different.
The policies that were right 50-60 years back, need improvement in today’s changed circumstances, he said, adding the focus of the reforms has been to put pubic money to its best use.
But there are public sector enterprises that are loss making and survive only on support by taxpayers’ money, he said. “The money which is the right of the poor, right of youth is spent on these enterprises and hence this is burdensome on the economy.”