The privatisation policy announced in the 2021-2022 Budget is a watershed reform like 1991, Dipam secretary Tuhin Kanta Pandey told TOI in an interview as he detailed the next steps for strategic sales, which can potentially result in privatisation of public sector companies such as SAIL and Bhel. For the moment, the government is looking to conclude the sale of BPCL and Air India by the second quarter. Excerpts:
How do you view the new disinvestment target and how confident are you of completing the pipeline of strategic sales?
Last year, Covid-19 set in when several of our transactions were just put out and we had to make a lot of extensions on request of the investors. That is now behind us and things are looking up and we hope to complete the sales. I am hopeful it is a realistic target.
What about the asset monetisation pipeline that is going to be launched?
The specific mention of asset monetisation is a recognition of the fact that there is a lot of potential on that side. As far as government land is concerned, revenues will come to the government. On the non-core side, there is a specific mention that we could have an SPV where a certain kind of a capacity can be built in a faster and methodical way. Typically, not everything is auction and direct sale, there can be many cases which could go for a development model or revenue-share model or concession.
We now have the privatisation policy. What are the next steps?
It is a landmark shift and watershed moment and it has given a road map for the next four to five years. In think after the 1991 reforms, as far as the public sector is concerned, this is the biggest reform. We had a policy in 2004 but it was case-by-case basis. For the first time we have said that the entire non-strategic sector is available, which means you have a steel sector, it is completely available for privatisation.
It could be SAIL too?
Of course. The point is how do you do it, sequencing and all that? We are going to issue those in our policy. An alternative mechanism has been set up (group of ministers) which will decide what needs to be done in the bare minimum sector. The first bucket is national security, second critical infrastructure, third bucket energy security and minerals, fourth bucket is financial services. We can go for consolidation, subsidiarisation — there are different types of categories. Privatisation is the preferred option. There are companies in the heavy industries space, which will be in the non-strategic sector. They could be for closure as well. We will need to do the demand assessment when we roll out the policy.
What about the LIC IPO?
For LIC IPO, we have put it in the Act that we will offer something to the policyholders. We are telling the policyholders to become shareholders. Up to 10% can be offered to policyholders. They are the same retail investors. Why should only the government be in shareholding of LIC? The second point is LIC will also change, LIC also has to innovate because they have such a large market share, they have a natural advantage.