India's finance minister Nirmala Sitharaman said the government would ensure protection of rights and perquisites of workers of public sector units that are put up for privatisation, and that all earlier commitments made would be honoured. The FM also said that PSUs that are being privatised would receive capital infusion and professional management.
The FM made the commitment during an interaction following her address to India Inc at the Economic Times Awards function. “When we are speaking out privatisation, I do recognise that these units are in the economic activity that is critical for the country. Privatisation is not going to end up being selling for closure, I am selling it to continue to be in business because I cannot run it efficiently and I do not have money of the scale that is needed to invest,” said Sitharaman.
The FM in her budget speech last month had unveiled a massive privatisation and asset monetisation plan for PSUs. The government may reduce the number of PSUs over time to just around two dozen from over 300 at present, following the new policy that focuses on privatisation in non-core areas while shutting down loss making state run enterprises.
Besides inviting the private sector to invest in PSUs, the government is actively engaging with sovereign wealth funds globally to attract capital into the proposed development finance institution (DFI). "We are making sure that we're engaging with sovereign and pension funds of the world so that when we're coming up with DFIs, we'll have great interest,” she said.
The finance minister said that the growth path of the global economy had turned positive and India’s growth path is being pitched a notch higher with a clear sign of revival not just in manufacturing but in the services sector as well. Several multilateral agencies estimate the Indian economy to grow in double digits in 2021-22 to emerge as the fastest growing major economy after the Covid-19 induced lockdown hurt the economy. It is forecast to contract around 8% in the current fiscal year and rebound next year on the back of measures unveiled by the government to script a turnaround.
Sitharaman said that the government's focus on the concept of Atmanirbhar Bharat was not a throwback to socialist India. “I have been very selective about the items on which we have raised tariffs. These are essentially final consumer goods that are manufactured in India, not on intermediaries and raw materials. Import substitution does not blindly stop imports,” the FM said.
On the suspension of the Insolvency and Bankruptcy Code coming to an end, Sitharaman said that the government does not want the withdrawal of the standstill to hurt companies, but at the same time it is aware of the need to return to normalcy.
