The Aryavarth Express
New Delhi: The Confederation of Indian Industry (CII) has called for a calibrated and accelerated privatisation programme to unlock value from public sector undertakings (PSUs), as part of its recommendations for the Union Budget 2026–27. The industry body said such measures are crucial to sustaining capital expenditure and meeting developmental priorities amid global economic uncertainty.
Highlighting the growing role of private enterprise in India’s growth story, CII Director General Chandrajit Banerjee said a forward-looking privatisation policy aligned with the vision of Viksit Bharat would allow the government to focus on core governance functions while enabling the private sector to drive industrial transformation and job creation.
CII stressed the need to fast-track the implementation of the government’s Strategic Disinvestment Policy, which envisages exiting all public sector enterprises (PSEs) in non-strategic sectors and retaining only a minimal presence in strategic areas. According to the chamber, this strong policy intent should now be backed by swift and structured execution.
To strengthen the privatisation programme, CII proposed a four-pronged strategy. First, it recommended shifting to a demand-based approach for selecting PSEs for privatisation. Instead of identifying enterprises upfront and then seeking investor interest, CII suggested first gauging market demand across a wider pool of enterprises and prioritising those that attract strong investor interest and valuations. This, it said, would improve price discovery and reduce delays caused by weak demand.
Second, CII called for the announcement of a rolling three-year privatisation pipeline. Providing advance visibility on which enterprises are likely to be privatised would give investors greater planning clarity, encourage deeper engagement, and support more realistic valuations, thereby expediting the process.
Third, the industry body proposed creating a robust institutional framework to oversee privatisation. This would include a ministerial board for strategic direction, an advisory board of industry and legal experts for independent benchmarking, and a professional management team to handle execution, due diligence, market engagement, and regulatory coordination. Such a structure, CII said, would enhance predictability, accountability, and investor confidence.
Fourth, recognising the complexity of full privatisation, CII suggested a calibrated disinvestment approach as an interim measure. Under this, the government could gradually reduce its stake in listed PSEs to 51 per cent initially, retaining control while unlocking significant market value. Over time, the stake could be further reduced to between 33 and 26 per cent.
According to CII’s analysis, reducing the government’s stake to 51 per cent in 78 listed PSEs could unlock close to ₹10 lakh crore. In the first two years, disinvestment in 55 PSEs where government ownership is 75 per cent or less could mobilise around ₹4.6 lakh crore. In a subsequent phase, disinvestment in 23 PSEs with government stakes above 75 per cent could generate an additional ₹5.4 lakh crore.
“A calibrated reduction of government stake in listed PSEs to 51 per cent and even lower is a pragmatic step that balances strategic control with value creation,” Banerjee said, adding that unlocking nearly ₹10 lakh crore would provide vital resources for infrastructure development and fiscal consolidation.
CII concluded that a predictable and transparent privatisation framework would maximise value realisation, strengthen investor confidence, and free up public resources for priority areas such as health, education, and green infrastructure, while retaining minimal presence in strategic sectors. As per convention, the Union Budget for 2026–27 is scheduled to be presented on February 1.
