Now government companies will not be sold, government backs down from privatization! Know what is the government's preparation
Budget 2024: The central government can now give what it can to improve the profitability of government companies and earn revenue from it instead of selling them to private companies and industrialists (privatization).
Budget 2024: The central government can now give what it can to improve the profitability of government companies and earn revenue from it instead of selling them to private companies and industrialists (privatization). According to media reports, the central government is now preparing to put the privatization program on hold.
The Modi government had made an ambitious plan for the privatization of government companies. It was believed that it could be taken forward rapidly after forming the government for the third time.
But now the government has indicated to back down from this plan. The report quoted government sources as saying that the government is working on a plan to improve the profitability of more than 200 government companies.
What is the government's preparation
According to sources, Finance Minister Nirmala Sitharaman may announce a new scheme in the general budget to be presented on July 23. This includes selling a large part of the unused land with the companies and monetization of other assets. Its aim is to raise $ 24 billion i.e. about Rs 2 lakh crore in the current financial year 2024-24 and reinvest it in PSU companies.
Under the new scheme, 5-year performance and production targets can be set for each government company instead of short-term targets. An official said that the government is now focusing on increasing the intrinsic value of PSU companies by shifting focus from indiscriminate asset sales.
This is also the preparation
According to the plan announced in the year 2021, two banks, an insurance company and government companies in the steel, energy and pharmaceutical sectors were to be sold. Also, loss-making companies were to be closed.
But the government was successful in selling only debt-ridden Air India to the Tata Group. It had to withdraw the plan to sell some other companies. Only 3.5 percent stake of the government has been sold in LIC. Also, shares have been sold in some other companies.
Now the central government also wants to start succession planning in its majority companies. Also, there is a proposal to train 2.30 lakh managers in these companies to prepare them for senior roles.