Union Budget: 2 PSU banks, 1 insurance firm to be privatised, LIC IPO this year

This entire plan is part of the government disinvestment programme. The government budgeted ₹1.75 lakh crore from stake sale in public sector companies and financial institutions in the fiscal year 2021-22.

Finance minister Nirmala Sitharaman on Monday announced that two public sector banks and one general insurance company will be privatised. She also said initial public offering (IPO) of Life Insurance Corporation (LIC) will take place in the financial year beginning April. The government also announced ₹20,000 crore recapitalisation of PSU banks.

Finance minister Nirmala Sitharaman during the budget session of Parliament at Parliament House in New Delhi. (PTI)

"Other than IDBI Bank, we propose to take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22. This would require legislative amendments and I propose to introduce the amendments in this Session itself," Sitharaman said in her budget speech.

However, the names of the banks that will be privatised have not been disclosed yet. The government which currently holds the majority stake in PSU banks, expects to bring down the stake in the two PSU banks below 51 per cent or sell the entire stake to private ownership.

The government has also not disclosed the name of the general insurance company that will be privatised.

Meanwhile, the government has already initiated the process for LIC IPO. Currently, the government owns the entire 100 per cent stake in LIC.

Sitharaman also said that the strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam Ltd, among others would be completed in 2021-22.