India will reduce the number of central government companies⁠— some of them will get bigger and some will be sold to private players

India will reduce the number of central government companies⁠— some of them will get bigger and some will be sold to private players
Union Finance Minister Nirmala Sitharaman briefs the media on Economic package on May 13BCCL
  • India’s central public sector enterprises will exist only in ‘strategic sectors’ where the government role will be important.
  • The Narendra Modi government has decided to use the COVID-19 crisis to merge or privatise many of these and expose them to private competition.
  • There are 339 public sector enterprises in India.
There are 339 public sector enterprises in India and often at the receiving end of the argument that the ‘government has no business being in business’. However, the Narendra Modi government has decided to use the COVID-19 crisis to merge or privatise many of these and expose them to private competition.

India’s central public sector enterprises will exist only in ‘strategic sectors’ where the government role will be important. But there will be two different sets.

Here’s how it will work.

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  1. In one set, there will be at least one central public sector company which will compete with private players.
  2. In the second set, there won’t be more than four public sector enterprises and private players will be allowed.
“If there are sectors where there are too many government companies, they will be brought together in such a way that there won't be more than four. A detailed policy will soon be issued,” Finance Minister Nirmala Sitharaman said but stopped short of mentioning what these sectors will be.

Here’s the list of total of all the central public sector enterprises in India.

These are the list of Maharatna PSUs in India

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  • Steel Authority of India Limited (SAIL)
  • National Thermal Power Corporation ( NTPC)
  • Oil and Natural Gas Corporation (ONGC)
  • Bharat Heavy Electricals Limited (BHEL)
  • Bharat Petroleum Corporation Limited (BPCL)
  • Hindustan Petroleum Corporation Limited (HPCL)
  • Indian Oil Corporation Limited (IOCL)
  • Power Grid Corporation of India (POWERGRID)
  • Gas Authority of India Limited (GAIL)
  • Coal India Limited (CIL)
As of March, 2019 the net worth of all CPSEs in India stood at ₹12.08 lakh crore.

The government has already begun the process of privatisation of several public companies. Air India – the government-owned airline – has been on the block for a while now. Aside from this, there are also pending proposals to sell the central government stake in companies like BPCL, Industrial Development Bank of India (IDBI), and Container Corporation of India (Concor). It is not clear as of now whether the new reforms will affect these decisions.

During the budget announcements in February 2020, the Indian government had set a target of gaining ₹2.1 lakh crore from disinvestments by FY21. This is even after in the previous financial year, the government had to revise its targets from ₹1.05 lakh crore to ₹65,000 crore.

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An ET report had quoted an official from the Department of Investment and Public Asset Management (DIPAM) who said that the government is looking at the “option of strategic sale of smaller CPSEs to their sector counterparts.”

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