Echoing sentiments from the corporate world, CII has formally requested the central government to expedite privatization of PSUs, terming it a ‘game-changer’ for India’s economy. The plea highlights untapped potential in state-owned firms ripe for private sector infusion.
Decades of protectionism have left many PSUs bloated and uncompetitive. CII data reveals they account for 15% of GDP but lag in innovation and exports. Privatization, per CII, would unleash entrepreneurial energy and global best practices.
Recent flops like the stalled IDBI Bank deal underscore execution gaps. CII recommends time-bound divestment calendars, digital bidding platforms, and performance-linked incentives for managements.
‘This isn’t about selling family silver; it’s about creating national champions,’ asserted a CII task force report. It draws parallels with Brazil and South Africa, where privatization fueled sustained growth.
Political economy plays a role too. Coalition dynamics and vote-bank politics have tempered enthusiasm. Yet, public opinion is shifting, with surveys showing majority support for privatization if jobs are protected.
Financially, it’s a boon: projections indicate Rs 4-6 lakh crore realizable value, reducible fiscal deficit by 1-2% of GDP. This capital could turbocharge capex in roads, railways, and renewables.
As global headwinds loom, CII’s urgency is palpable. A decisive privatization thrust could differentiate India from peers, attracting marquee investors like ADIA and Temasek. The ball is in the government’s court—act now or risk missing the reform window.