Finance minister Nirmala Sitharaman announced big-ticket privatisation agenda of the government which included selling two PSU banks, one general insurance company, seven major ports and the mega LIC IPO to hit the market.

Although the disinvestment receipts is pegged at only Rs 1.75 lakh crore against Rs 2.10 lakh crore in the budget estimate for 2020-21, the revenue collection would be significantly higher if the budget proposals and those strategic sales like BPCL, Air India gets completed in 2021-22. Disinvestment proceeds collected in 2020-21 has been only Rs 32,000 crore.

The Congress party tore into the budget with several party leaders including Rahul Gandhi calling it one that aims to “handover India’s assets” to “crony capitalists”. “Forget putting cash in the hands of the people, Modi govt plans to handover India’s assets to his crony capitalists friends,” Rahul Gandhi tweeted.

Sitharaman hit back at the former Congress chief asking him to first explain why his government in Kerala gave away one seaport to a “crony capitalist” on invitation. She was raising the privatisation of Vizhinjam Port in Kerala by the then Congress government.

All India Bank Employees Association (AIBEA), the largest trade union of bank employees, has threatened to strike work against budget proposals such as privatisation of state-run banks and setting up of bad bank. “Privatising them means handing over people’s money to private hands with vested interests,” AIBEA said in a statement.

RSS-aligned Bharatiya Mazdoor Sangh (BMS) expressed disappointment over the government’s budget proposals with regard to disinvestment and foreign direct investment especially in the insurance sector.

The privatisation of two PSU banks would be other than IDBI, she said while allocating Rs 20,000 crore for recapitalisation of banks.

The government currently holds a majority stake in PSU banks. The government is expected to bring down the stake in the two PSU banks below 51 per cent or sell the entire stake to private ownership. This would be reversal of the bank nationalisation 1969.

Life Insurance Corporation of India (LIC) will go for an initial public offering in 2021-22 as well, she said, even though the proposal had been made originally in last year’s budget, but could not go through due to pandemic and changes in the LIC Act.

There are four PSU general insurance companies: New India Assurance, United India Insurance (UII), National Insurance Company (NIC) and Oriental Insurance Company (OIC).

Sitharaman also said land assets of PSUs to be monetised either direct or sale or concession agreements after transferring the assets to a special purpose vehicle (SPV). Railways will also hive off the dedicated freight corridors and sports stadia.

Lauding the privatisation move, CII president Uday Kotak said “all these are bold move indeed and are expected to buttress the growth recovery process apart from making out financial sector future ready…the move of the government is to fund the pump-priming of the economy through raising of revenues by pursuing an aggressing disinvestment programme and asset monetisation programme in the next fiscal.”

As part of the ambitious plan to privatise central public sector enterprises (CPSEs), she said the government will maintain a bare minimum presence in only four strategic sectors -- atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; and banking, insurance and financial services.

All CPSEs in other sectors will be privatised, she said, adding that the government has approved the policy that was announced as part of the Atmanirbhar package.

“In four areas, a bare minimum number of firms will be retained and the rest will be privatised. In other sectors, all firms will be privatised,” she said, adding that the policy approved by the government provides a clear roadmap for disinvestment in strategic and non-strategic sectors.

The firms that will be privatised in 2021-22 include Bharat Petroleum Corp Ltd, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, Bharat Earth Movers Ltd, and Pawan Hans, she said. Most of these firms are in various initial stages of stake sale.