India’s leading industry body, the Confederation of Indian Industry (CII), has made a strong pitch to the central government to accelerate the privatization of public sector undertakings (PSUs). In a recent statement, CII emphasized that expediting this process would unlock significant value, boost efficiency, and attract substantial private investments into these entities.
The appeal comes at a time when the government’s divestment targets have repeatedly fallen short of expectations. For 2023-24, the fiscal target was set at Rs 51,000 crore, but actual receipts hovered around Rs 25,000 crore, highlighting persistent delays in the privatization pipeline. CII argues that public sector companies, burdened by bureaucratic inefficiencies and limited agility, are ill-equipped to compete in a dynamic global market.
‘Speeding up privatization is crucial for economic revival,’ said a CII spokesperson. ‘Private ownership brings in best-in-class management practices, technological upgrades, and a sharper focus on profitability.’ The industry chamber pointed to successful global examples, such as the UK’s privatization wave in the 1980s, which transformed sluggish state firms into competitive powerhouses.
CII’s push aligns with broader economic reforms aimed at reducing the government’s equity stake in non-strategic sectors. Sectors like steel, fertilizers, and tourism have been earmarked for divestment. However, labor unions and political opposition have often stalled progress, citing job losses and national security concerns.
Experts believe that privatization could generate over Rs 5 lakh crore in the next few years if executed decisively. This windfall could fund critical infrastructure projects, social welfare schemes, and fiscal deficit reduction. CII also recommended simplifying approval processes, offering incentives to buyers, and ensuring transparent bidding to mitigate controversies.
As the Modi government eyes a third term, this call from CII underscores the urgency of bold reforms. With elections around the corner, the government faces a delicate balancing act between economic liberalization and populist pressures. Privatization’s success could define India’s growth trajectory in the coming decade, positioning it as a top global economy.