The Centre will come up with a new Public Sector Enterprise Policy, and open up all sectors to the private sector.
Speaking to the media here, Finance Minister Nirmala Sitharaman said public sector enterprises (PSE) will play an important role in certain defined areas.
Under the new policy, a list of strategic sectors requiring presence of PSEs in public interest will be notified and in these sectors, at least one enterprise will remain in the public sector and private sector will also be allowed.
Notably, Sitharman announced that in the other, non-strategic sectors, all public sector units will be privatised. The timing of the privatisation will depend on feasibility and other factors, she added.
The minister said that to minimize wasteful administrative costs, the number of enterprises in the strategic sector will ordinarily be only one to four and the others will be privatized, merged or brought under holding companies.
In line with the decision to allow private companies in all sectors, the minister had on Saturday announced the commercial mining of coal where any party can bid for coal blocks. The decision ends the monopoly of Coal India Ltd (CIL).
Further, the Centre will also allow private players in further space exploration programme of India and atomic energy research reactors and facilities would be set up in the public-private partnership mode, as per the announcements made on Saturday.
Among the disinvestment plans, the Centre has already been trying to sell Air India, which has not yet fructified. Also, strategic sale oil PSU BPCL has been started but impacted due to Covid-19.
Companies, including India Tourism Development Corporation, may be next on the block. Also, consolidation and strategic sale of PSUs in power and oil and gas sectors may be carried out this year. The government may also go ahead with the sale of some of the production units of power equipment maker BHEL and steel producer SAIL.
If the new policy and the privatisation plan bear fruit, it may also help India to achieve its disinvestment target or may even surpass it.
For the financial year 2020-21, the government has pegged the disinvestment target at Rs 1.20 lakh crore. Last year the government could achieve disinvestment of just Rs 65,000 crore though original target was Rs 1,05,000 crore.
( With inputs from IANS )