2409:4040:D8C:C2D4:C51:60B4:CB84:421E at 02:03, 2 September 2021

2021-09-02T02:03:24Z

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{{Use dmy dates|date=May 2019}}
{{Use Indian English|date=May 2019}}
{{more citations needed|date=July 2016}}

[[Disinvestment]] in Public sector undertakings in India, is not a process of public asset sales done by the [[Prime Minister of India]] on behalf of the [[Government of India]]. It can be directly offered for sale to the public or indirectly done through a bidding process. The Public Enterprises Survey (2015–16), brought out by the Department of Public Enterprises, [[Ministry of Heavy Industries and Public Enterprises|Ministry of Heavy Industries]], & [[Government of India]] on the performance of Central Public Sector Enterprises was placed in both the Houses of Parliament on 21 March 2017. There were 331 CPSEs in 2017-18, out of which 257 were in operation. The remaining 74 of the CPSEs were being established.<ref>{{Cite web|url=http://pib.nic.in/newsite/PrintRelease.aspx?relid=159631|title=Performance of Central Public Sector Enterprises (CPSEs) during 2015-16|website=pib.nic.in|access-date=2018-04-22}}</ref>

Following the theories of [[Economic liberalism|Economic Liberalism]] and [[Infrastructure-based development]] as referenced in the [[Union budget of India|Union Budget of India]], the total expenditure of the [[Government of India]] increased from ₹1,13,422 crore in 1991–92<ref>{{Cite news|url=http://www.downtoearth.org.in/coverage/analysis-of-union-budget-since-1947-56867|title=Analysis of Union Budget since 1947|access-date=2018-04-22|language=en}}</ref> to ₹ 21,46,735 Crore in 2017–18.<ref>{{Cite web|url=https://www.indiabudget.gov.in/ub2018-19/bag/bag6.pdf|title=Union Budget 2018-19}}</ref> To help raise the necessary capital for these expenditures and also to minimize the nation's [[fiscal deficit]], the [[Government of India]] started divesting its stake in the country's [[Public sector undertakings in India|Public sector undertakings]]. Conceding to the demands of [[privatization]], the [[Government of India]] slowly began the divesting itself from PSU's despite stiff resistance from labour unions. The below table provides data regarding the disinvestment process which started in 1991 (barring 2 small units being[[CMC Limited]] and Patherele Concrete).

Major disinvestment steps were taken in the past by the [[Bharatiya Janata Party|BJP]]-led [[National Democratic Alliance|NDA]] government between 1999 and 2004. [[Bharatiya Janata Party|BJP]] made strategic disinvestments in [[Bharat Aluminium Company]] (BALCO), [[Hindustan Zinc]]<ref name="moneycontrol.com">{{Cite web|url=http://www.moneycontrol.com/financials/hindustanzinc/profit-loss/HZ|title=Hindustan Zinc Track Record Moneycontrol}}</ref> (both to Sterlite Industries), [[Indian Petrochemicals Corporation Limited]]<ref name=":0"/> (to Reliance Industries) and [[VSNL]]<ref name="VSNL Track record Moneycontrol">{{Cite web|url=http://www.moneycontrol.com/financials/tatacommunications/profit-loss/TC17|title=VSNL Track record Moneycontrol}}</ref> (to the Tata group). While track record and future of these companies were good, they have all flourished under the private sector companies that they were sold to.<ref name=":0">{{Cite web|url=http://www.moneycontrol.com/financials/indianpetrochemicalscorporation/profit-loss/IPC|title=IPCL Performance moneycontrol Old format}}</ref><ref name="moneycontrol.com"/><ref name="VSNL Track record Moneycontrol"/>

Between 2014 and 2018 the [[Bharatiya Janata Party|BJP]]-led [[National Democratic Alliance|NDA]] government divested a total of ₹1,94,646 crore,<ref name="dipam.gov.in">{{Cite web|url=http://dipam.gov.in/disinvestment-till-now/2502|title=Summary {{!}} Department of Investment and Public Asset Management {{!}} Ministry of Finance {{!}} Government of India|website=dipam.gov.in|language=en|access-date=2018-04-22}}</ref> which included minority and majority stakes of the most profitable Public sector undertaking companies, such as the [[Oil and Natural Gas Corporation|ONGC]]-[[Hindustan Petroleum|HPCL]] deal which was worth ₹ 36,915 crore.<ref>{{Cite web|title=Hindustan Times ONGC-HPCL Deal|url=https://economictimes.indiatimes.com/markets/expert-view/ongc-hpcl-merger-a-win-win-deal-rs-sharma-former-cmd-ongc/articleshow/63479227.cms}}</ref> In the budgetary announcements of the financial year 2017-18, the late Finance minister [[Arun Jaitley]] announced that the government will initiate a strategic disinvestment in 24 PSUs, including [[Air India]] which never made a profit since 2007-08 and has cost the taxpayer over ₹69,575.64 crores over the past decade.<ref>{{Cite web|title=Disinvestment-bound Air India’s loss soars to a record|url=https://www.livemint.com/companies/news/air-india-to-report-biggest-ever-annual-net-loss-during-2018-19-puri-11575556292494.html|last=Kundu|first=Rhik|date=2019-12-05|website=Livemint|language=en|access-date=2020-05-18}}</ref> This would have been the first year in which the government was on track to hit the divestment target.<ref>{{Cite web|url=https://economictimes.indiatimes.com/markets/stocks/news/disinvestment-target-for-fy19-set-at-rs-80000-crore-to-top-rs-1-lakh-crore-in-fy18/articleshow/62739681.cms|title=Disinvestment target for FY19 set at Rs 80,000 crore; to top Rs 1 lakh crore in FY18.}}</ref> However, this did not go through as planned since the [[Coronavirus disease 2019|Covid-19]] crisis threw the entire world economy into disarray.<ref>{{Cite news|last=Aulakh|first=Gulveen|date=2020-04-08|title=Covid-19 throws a wrench into India's disinvestment plans|work=The Economic Times|url=https://economictimes.indiatimes.com/news/economy/finance/covid-19-throws-a-wrench-into-indias-disinvestment-plans/articleshow/75034686.cms?from=mdr|access-date=2020-05-18}}</ref> On 17 May 2020, as part of a [[Stimulus (economics)|stimulus package]] the Finance minister [[Nirmala Sitharaman]] announced that the government will privatize all [[Public sector undertakings in India|Public sector enterprises]] in non-strategic sectors. She also stated that in strategic sectors, the number of PSU's will be limited to 4. In strategic sectors with more than 4 PSU's, the government will privatize, merge or consolidate the PSU's under holding companies in order to reduce wasteful administrative costs. [[Nirmala Sitharaman]] stated that there is a need for a coherent policy where all sectors are open to private sector participation while PSU's play an important role in defined areas.<ref>{{Cite web|title=Public sector enterprises in non-strategic sectors to be privatised|url=https://www.livemint.com/companies/news/public-sector-units-psus-in-non-strategic-sectors-to-be-privatised-11589698010329.html|date=2020-05-17|website=Livemint|language=en|access-date=2020-05-18}}</ref>

Since financial year 1991-92 to 2017-18 the [[Government of India]] sold public assets totalling ₹3,47,439 Crore. In recent years, certain [[Public sector undertakings in India|public sector undertakings]] performed reasonably well and paid significant dividends to the government,<ref>{{Cite web|url=http://pib.nic.in/newsite/PrintRelease.aspx?relid=159631|title=Performance of Central Public Sector Enterprises (CPSEs) during 2015-16|website=pib.nic.in|access-date=2018-04-22}}</ref> whereas other PSU's such as [[Air India]], [[Bharat Sanchar Nigam Limited|BSNL]], and [[Mahanagar Telephone Nigam Limited|MTNL]] made huge losses, costing the taxpayer massive amounts of money.<ref>{{Cite news|agency=Press Trust of India|date=2020-02-10|title=BSNL, Air India and MTNL highest loss-making PSUs in FY19: Survey|work=Business Standard India|url=https://www.business-standard.com/article/companies/bsnl-air-india-and-mtnl-highest-loss-making-psus-in-fy19-survey-120021001268_1.html|access-date=2020-05-18}}</ref> Net Profit of all 257 operating CPSEs during 2016-17 stood at ₹ 1,27,602 crore compared to ₹ 1,14,239 crore during 2015-16 showing growth of 11.70%,<ref>{{Cite news|url=https://twitter.com/CPSEconclave/status/982528403633995776?s=17|title=CPSE Conclave on Twitter|work=Twitter|access-date=2018-04-22|language=en}}</ref> while Loss of loss incurring CPSEs minimized to ₹ 25,045 crore in 2016-17 compared to ₹ 30,759 crore in 2015-16 showing a decrease in loss by 18.58%.<ref>{{Cite news|url=https://twitter.com/CPSEconclave/status/982520855614885888?s=17|title=CPSE Conclave on Twitter|work=Twitter|access-date=2018-04-22|language=en}}</ref>

{| class="wikitable sortable "
|-
!Year
!Total Receipts By Stake Sales (Rs. Crore)
!Inflation Adjusted Total receipts (Rs. Crore) (In 2019 Rupees)<ref>{{Cite web|url=https://www.inflationtool.com/indian-rupee|title= India Inflation calculator}}</ref>
|-
|1991-92||3,037
|18,743
|-
|1992-93||1,912
|10,926
|-
|1993-94||0
|0
|-
|1994-95||4,843
|23,271
|-
|1995-96||168
|735
|-
|1996-97||379
|1504
|-
|1997-98||910
|3,397
|-
|1998-99||5,371
|17,386
|-
|1999-00||1,860
|5,993
|-
|2000-01||1,871
|5,825
|-
|2001-02||5,657
|16,750
|-
|2002-03||3,347
|9,634
|-
|2003-04||15,547
|43,006
|-
|2004-05||2,764
|7,367
|-
|2005-06||1,569
|3,961
|-
|2006-07||0
|0
|-
|2007-08||4,181
|9,392
|-
|2008-09||0
|0
|-
|2009-10||23,552
|41,948
|-
|2010-11||22,144
|36,029
|-
|2011-12||13,894
|21,229
|-
|2012-13||23,956
|32,925
|-
|2013-14||15,819
|19,987
|-
|2014-15||24,348
|28,967
|-
|2015-16||23,996
|26,851
|-
|2016-17||46,247
|50,620
|-
|2017-18||1,00,056
|1,05,303
|-
|2018-19||84,972.16
|84,972
|-
|2019-20||50,298.64 <ref>{{Cite web|url=https://www.dipam.gov.in/dipam/past-disinvestment |title= India Inflation calculator}}</ref>
|45,804.9
|}
'''Total Sum Till 2017-18 ₹ 3,47,439'''<ref name="dipam.gov.in"/>

==See also<ref name=":0" />==

* [[Public sector undertakings in India]]
* [[List of public sector undertakings in India]]
* [[Public sector banks in India]]
* [[Banking in India]]
* [[Five-Year Plans of India]]

==References==
{{Reflist}}

{{Ministry of Finance (India)}}
{{authority control}}

[[Category:Government-owned companies of India|Government-owned companies of India]]
[[Category:Public sector in India]]
[[Category:Economic reforms]]

Disinvestment of Public Sector Units in India - Revision history

2409:4040:D8C:C2D4:C51:60B4:CB84:421E at 02:03, 2 September 2021