In a significant intervention, the Confederation of Indian Industry (CII) has appealed to the Union Government to hasten privatization efforts for public sector enterprises. This comes amid growing frustration over sluggish progress in disinvestment goals.
CII’s memorandum outlines how accelerated privatization would alleviate fiscal pressures, optimize resource allocation, and spur competitiveness. ‘PSUs must evolve or perish in a private-sector dominated landscape,’ it states emphatically.
Historical data backs this view: privatized entities have shown 20-30% higher productivity gains. Yet, India’s divestment program has underperformed, achieving less than 50% of targets in recent years due to policy flip-flops and external disruptions like COVID-19.
Key sectors primed for change include banking, insurance, oil, and power. CII advocates for a ‘big bang’ approach—bundling multiple PSUs for auction to maximize proceeds and minimize administrative drag.
Challenges abound: employee resistance, minority stakeholder issues, and geopolitical sensitivities in strategic assets. CII suggests robust rehabilitation packages and sovereign wealth fund participation to smooth transitions.
Economically, the stakes are high. Privatization revenues could bridge the infrastructure funding gap, estimated at $1.5 trillion by 2030. It would also signal India’s commitment to reforms, boosting investor confidence.
The appeal resonates with Finance Minister Nirmala Sitharaman’s vision of ‘minimum government, maximum governance.’ With state elections influencing national policy, CII’s voice adds weight to pro-reform lobbies. Success here could catalyze a virtuous cycle of growth, employment, and innovation, cementing India’s rise as an economic superpower.