The industry body has estimated that a calibrated reduction in the government’s stake to 51% in its 78 listed public sector enterprises (PSEs) could fetch about ₹10 lakh crore, which the government could use to bolster development and economic growth.
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Ahead of the budget, the CII has outlined a four-pronged strategy to speed up privatisation. The first is that the government should gauge investor interest across a broader set of state-run firms and then prioritise the privatisation of those companies that meet valuation expectations.
Currently, the government first identifies state-run companies for sale and then invites investor interest in them. So, when expected valuation is not met, the process often stalls.
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The second is that the government should announce a rolling, three-year pipeline of privatisation candidates. This, it said, would “encourage deeper investor engagement and more realistic valuation and price discovery”. Third, it suggests an institutional framework to bolster oversight and accountability to make privatisation predictable and professionally managed.Fourthly, in a calibrated strategy, the government could reduce its stake in its listed companies in a phased manner to 51% initially and further bring it down to between 33% and 26%.