Govt to throw open almost all sectors of economy to private players, says FM Nirmala Sitharaman

India, on Sunday, threw open almost all sectors of its economy to the private players, barring the strategic ones, where at least one enterprise will remain in the public sector but private sector will also be allowed.

Announcing her fifth and last tranche of stimulus to soften the blow of COVID-19, Finance Minister Nirmala Sitharaman said, “a new coherent public sector enterprises policy will be formulated that will define strategic sectors which will have not more than four PSUs”.

Barring strategic sectors, she said, all public sector enterprises will be privatized. The minister said the move will minimise wasteful administrative costs.

She said, “the number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatised/merged/brought under holding companies".

To provide a fillip to employment, the minister said the government will now allocate an additional Rs 40,000 crore under MGNREGS, which will help generate nearly 300 crore person days.

To fight the virus in a better way, she said all debt related to COVID-19 should be excluded from the category of default.

“Debts related to COVID-19 shall be excluded from ‘default’ under the IBC. No fresh insolvency proceedings will be initiated upto one year, she said.

Additionally, a special insolvency framework will be notified for MSMEs under Section 248 of IBC. Minimum threshold to initiate insolvency proceedings has been raised to Rs 1 crore from Rs 1 lakh at present.

She also announced an increase in borrowing limit of states to 5% of GDP from the existing 3% in 2020-21. This will release Rs 4.48 lakh crore extra to states.

She, however, said the states have so far borrowed only 14% of the limit authorised but 86% of the authorised borrowing remains unutilised.