The government remains confident of completing the proposed stake sales in Life Insurance Corporation of India and Bharat Petroleum Corporation Ltd. (BPCL) by the end of this fiscal year, Chief Economic Adviser Krishnamurthy Subramanian said on Saturday.
“Privatisation of Air India is proceeding well... two bids have been received. Bharat Petroleum [privatisation] and LIC’s listing we are confident should happen by fourth quarter of this year,” Dr. Subramanian said speaking at the PGPMAX Leadership Summit 2021 of the Indian School of Business (ISB) in Hyderabad.
Describing the three stake sales as important components of the ₹1.75 lakh crore proceeds the Budget had estimated this year from privatisation, the Chief Economic Adviser said the enterprise policy focused on private sector was one of the key pillars of reforms being pursued by the government. Barring three to four public sector undertakings in three or four strategic areas including defence and oil and gas, the rest would be “privatised or taken into right hands so that efficiency gains can come about,” he added.
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The proposed privatisation of two public sector banks (PSBs) was also part of the policy. Privatisation of the two banks would be really critical considering PSBs were a bellwether of socialism, he said.
“In another 8-10 years, the Indian economy will look very different and much more efficient to what it is today when this process will be taken to its logical conclusion,” he said, adding that the current year would go down in history as a very important year for privatisation.
Noting that the Atmanirbhar Bharat idea was based on the private sector and an emphasis on achieving self reliance as opposed to the model until 1991 that focused on self-sufficiency, Dr. Subramanian said competition brought out the best.
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‘Change in mindset’
The CEA said there had also been a change in the mindset with the stress on “respecting private sector rather than chase guys in the private sector; this is something I feel will be enduring”. The private sector needed to be empowered, he said, asserting that trade and enabling trade were part of India’s DNA.
To a query on a V-shaped recovery post pandemic, the CEA asserted that India was the only country that had converted the crisis into an opportunity. “The V-shaped recovery was really predicated on the understanding of the fundamentals of economy,” Dr. Subramanian said.