CII for lowering stake in 78 PSEs to raise Rs 10 lakh crore

New Delhi: The Centre can mobilise Rs 10 lakh crore of productive capital by lowering its stake to 51% in 78 listed public sector enterprises (PSEs), the Confederation of Indian Industry (CII) has said, urging Union Finance Minister Nirmala Sitharaman to give a push to privatisation in the upcoming Budget.

In its pre-Budget proposals, the industry body has urged the government to mobilise resources through a calibrated approach to privatisation, focusing on sectors where private participation can enhance efficiency, technology infusion, and global competitiveness.

A CII analysis shows that reducing the government’s stake to 51% in 78 listed PSEs could unlock close to Rs 10 lakh crore, the industry body said in a statement.

It suggested that in the first two years of the roadmap, disinvestment strategy could target 55 PSEs where the government holds 75% or less, mobilising around Rs 4.6 lakh crore.

In the subsequent stage, 23 PSEs with higher government stakes (over 75%) could be disinvested, potentially bringing in Rs 5.4 lakh crore, it said.

“Unlocking nearly Rs 10 lakh crore of productive capital would provide vital resources to accelerate physical and social infrastructure development and support fiscal consolidation,” said CII Director General Chandrajit Banerjee.

Highlighting the strategic significance of privatisation in the current global economic landscape, Banerjee said, “India’s growth story is increasingly being powered by private enterprise and innovation. A forward-looking privatisation policy, aligned with the vision of Viksit Bharat, will enable the government to focus on its core functions while empowering the private sector to accelerate industrial transformation and job creation.”

CII has called for accelerating the implementation of the government’s strategic disinvestment policy, which envisions an exit from all PSEs in non-strategic sectors and a minimal presence in strategic ones.

To provide investors greater clarity and planning time, the industry lobby has urged the government to announce a rolling three-year privatisation pipeline, outlining which enterprises are likely to be taken up for privatisation during this period.

“This visibility would encourage deeper investor engagement and more realistic valuation and price discovery, which would contribute towards expediting the privatisation process,” it said.

CII has called for a shift to a demand-based approach in selecting PSEs for privatisation.

Under the current framework, the government identifies specific enterprises for sale and subsequently invites investor interest. However, when sufficient demand or valuation is not achieved, the process often stalls. CII has called for change in this practice, suggesting that the government first gauge investor interest across a broader set of enterprises and then prioritise those that attract stronger interest and meet valuation expectations.

Such an approach, CII believes, would ensure smoother execution and better price discovery. Structured feedback from potential investors could also help address procedural or regulatory bottlenecks.

CII has recommended setting up a dedicated body with a ministerial board for strategic guidance, an advisory board of industry and legal experts for independent benchmarking, and a professional management team to handle execution, due diligence, market engagement, and regulatory coordination for privatisation programme.