The NDA’s ambitious strategic sale agenda could face hurdles because of pressures within the coalition and a strengthened Opposition, analysts warned.
The complexities of coalition politics are expected to slow down the strategic sales of IDBI Bank, BPCL and other state-owned enterprises amid voter disenchantment
over jobless growth.
Analysts suggest the Modi administration will tread cautiously from now because of its increased reliance on coalition partners. Instead, the government might pivot towards more populist measures and welfare initiatives in the short term.
State elections in Delhi and Bihar in 2025, followed by Bengal, Assam, Tamil Nadu, Kerala, and Puducherry in 2026, will further complicate the landscape.
The BJP’s recent performance in the Rajya Sabha elections saw its tally go up to 97, falling three seats short of 100. This leaves the BJP-led NDA with 117 members, four shy of the 121 majority mark in the 245-member upper house.
Analysts believe the BJP will be cautious about advancing strategic sales, wary of providing the Opposition with ammunition over issues such as unemployment and uneven economic growth.
Finance ministry officials indicated the government would balance disinvestment and dividend payouts in its policy formulations. Further policy direction is expected during the Union budget.
Strategic sales were progressing for IDBI Bank, Shipping Corp and BEML. However, given the changed political landscape, sources suggest a reassessment will take place, with the NDA allies being consulted before moving forward.
In May 2022, the government called off the strategic sale of BPCL due to lack of investor interest.
The strategic disinvestment in IDBI Bank has faced numerous hurdles, including regulatory approval delays, security clearances, valuation differences, and state and general elections. Coalition partners’ approval will now be crucial for advancing the sale.
The Cabinet had previously approved the sell-off of BPCL in November 2019 and IDBI Bank by CCEA in May 2021. Under the changed circumstances, they will need to take fresh approvals, analysts said.
The interim budget did not set a disinvestment target but allocated ₹50,000 crore under miscellaneous receipts, including asset monetisation and disinvestments.
