Budget may unveil PSE privatisation policy, sources say

The Budget for the fiscal beginning April 1 is likely to identify the strategic sectors PSUs where the government would like to retain its presence, the two sources aware of the matter said.

Finance Minister Nirmala Sitharaman in the Budget next week is likely to unveil a blueprint of a new privatisation policy, where the government will exit PSUs in the non-strategic sector, sources said.

Finance minister Nirmala Sitharaman had proposed the first legacy dispute resolution mechanism for central excise and service tax in her first budget, presented on July 5, 2019, for smoother functioning of the newly introduced Goods and Services Tax (GST) regime.

The Budget for the fiscal beginning April 1 is likely to identify the strategic sectors PSUs where the government would like to retain its presence, the two sources aware of the matter said.

The Cabinet on Wednesday cleared the new public sector enterprises (PSE) policy that will define strategic and non-strategic sectors.

The strategic sectors are likely to be ones that are critical for national interest and of the public good.

As part of 'Aatmanirbhar Bharat', the government in May had announced that there will be a maximum of four public sector companies in strategic sectors, and state-owned firms in other segments will eventually be privatised.

Under the policy, a list of strategic sectors will be notified where there will be at least one and a maximum of four public sector enterprise.

In other sectors, central public sector enterprises (CPSEs) will be privatised, depending on the feasibility.

The sources said the Budget is likely to focus on privatisation of CPSEs, which would help the government meet the resources needed to fund increased expenditure.

In the current fiscal, the government has mopped up ₹17,957 crore from CPSE minority stake sale and share buyback. This compares to the Budget target of ₹2.10 lakh crore for the entire fiscal.

There are about 249 operating CPSEs with a combined turnover and net worth of ₹24 lakh crore and ₹12 lakh crore, respectively. Of this, over 54 are listed on the bourses.