Time for Pawan Hans, Shipping Corp, BEML sale: DIPAM Secretary

The central government is expected to take forward proposals for privatisation of five-six public sector entities this financial year. Financial bids for Neelachal Ispat Nigam Ltd., Shipping Corporation of India, BEML Ltd. and Pawan Hans are expected during the year, Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, said today.

Speaking at an interactive session at the Confederation of Indian Industry’s (CII’s) ‘Global Economic Policy Summit 2021: Rebuilding Economies’, Pandey said that the “bold and clear” PSE policy of the government will require private sector participation. “Schemes such as the National Infrastructure Pipeline of Rs 111 lakh crore, asset monetisation plan of Rs 6 lakh crore and 13 PLI schemes are expected to generate about Rs 2.2 lakh crore investments in FY 2022-24, which will possibly lead to a 30% rise in capex of the private sector. All these are indicators of the government’s trust in the private sector,” he said.

In his address, Ajay Seth, Secretary, Department of Economic Affairs, Ministry of Finance, pointed out that India needs to double capital expenditure, which is at 5-6% of GDP, on a medium-term basis, which will require all avenues to channelise savings. “Economic growth has to come from a virtuous cycle of private investment with private sector having a larger and larger economic role, while government’s role will be that of a facilitator,” Seth said.

According to Seth, there has been a pivotal change in economic thinking for future economic planning in the last five-seven years where more reforms, removing frictions and cleaning up of processes have been the overarching approach of the government to fuel growth. Seth said that India’s banking sector is now on a much stronger footing post major reforms such as the Insolvency and Bankruptcy Code and setting up of a ‘bad bank’, among others. However, long-term financing is an area where India’s capital markets are yet to mature, he said.

Both the secretaries were speaking at an interactive session on Financing Growth at the CII summit. Uday Kotak, Past President CII and Chairman of the CII Global Economic Policy and Chandrajit Banerjee, Director General, CII, also spoke.