Cabinet approves PSU privatization policy ahead of Union budget
The Union Cabinet has paved the way for the long-awaited policy on the privatization of public sector enterprises (PSUs), and its details are expected to be announced in the Union budget.
The policy, which will establish a roadmap for the presence of public entities in strategic and non-strategic sectors, was discussed at the cabinet meeting on Wednesday and was approved, two government officials in the know.
The contours of the PSU privatization policy and strategy will be announced by Finance Minister Nirmala Sitharaman in the Union budget, which is due on February 1, said one of the two officials cited above. .
The policy was part of the Aatmanirbhar Bharat package announced by Sitharaman in May 2020 as a coherent policy where all sectors would be open to private sector participation. The government then announced its intention to limit the presence of PSUs to one to four in strategic sectors, and to privatize, merge or consolidate the remaining companies under a holding company. Firms in non-strategic sectors would see the government pull out altogether. The timetable for privatizing companies in non-strategic sectors will probably be decided on a case-by-case basis. Detailed consultations within government departments and ministries took place, which delayed the approval of the privatization policy, the second official said.
There have been many discussions between a group of ministries that have shaped and shaped the policy, the official added.
According to the initial policy draft launched by the Department of Investment and Public Asset Management, around 18 sectors have been classified as strategic sectors, including energy, fertilizers, telecommunications, defense, banking and l ‘insurance. These have been classified into mining and exploration, manufacturing and processing, and services.