India to privatise state-run companies amid coronavirus

NEW DELHI: India will privatise state-run companies in non-strategic sectors and stop fresh insolvency cases for a year, as the country battles with the economic challenge from the coronavirus.

Indian Finance Minister Nirmala Sitharaman said, “The list of strategic sectors requiring the presence of public sector undertakings in the public interest will be announced later.”

“A new ‘coherent’ public sector enterprises policy will be formulated that will define strategic sectors which will have not more than four Public Sector Undertakings or PSUs,” she added.

Indian officials also informed that most of the privatisations would happen in the next fiscal year, starting April 2021.

India has been trying to divest parts of state-run companies in sectors ranging from aviation to power to fill its coffers. “Such measures have to be done at times the government can get the right price,” said Shriram Subramanian, founder of proxy advisory firm InGovern, adding that the intention was good.

He said that in order to attract private investors, the government needed to improve the efficiency of state-run companies by freeing boards from interference by bureaucrats and “shed lot of flab” by cutting their labour force and hiring the right talent.

The government’s revenues have been hit hard as a nationwide lockdown imposed in March to prevent the spread of the novel coronavirus has ground the economy to a halt.