AI deal: End to 20 yrs of hiatus for CPSE privatisation
The Rs18,000-cr buyout deal is highest-ever amount garnered through privatisation, and is even higher than cumulative sum mopped up via strategic sales between 1999-00 and 2003-04
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Disinvestment In The Doldrums
- Govt garnered over Rs5,000 cr during 1999-2004 by privatising 10 CPSEs
- Privatisation process witnessed stagnation post 2004
- As the focus shifted to selling minority stake in CPSEs via FPO, OFS and also listing of profitable CPSEs
- In Budget-2021, the govt announced privatisation policy
- All PSUs will be privatised, barring atomic energy, space and defence segments
- Disinvestment target is Rs 1.75 lakh cr
- IPO of LIC would be completed in 2021-22
- 2 PSBs and one general insurance co would be privatized
New Delhi: After a hiatus of nearly two decades, the government's programme to privatise state-owned firms restarted with the handing over of debt-laden national carrier Air India to the Tata Group.
With the new owner shelling out Rs18,000 crore for the buyout of the 'Maharaja', this would be the highest-ever amount garnered through privatisation, and is even more than the cumulative sum mopped up through strategic sales from 1999-00 to 2003-04.
The government had in October 2021 inked the share purchase agreement with the Tata Group for sale of national carrier Air India for Rs18,000 crore. Tatas would pay Rs2,700 crore cash and take over Rs15,300 crore of the airline's debt. The deal also includes sale of Air India Express and ground handling arm AISATS. The Budget for 2021-22 has set a disinvestment target of Rs 1.75 lakh crore, compared to around Rs 32,835 crore estimated to be garnered in the last fiscal. Of the Rs 1.75 lakh crore, Rs 1 lakh crore is to come from selling government stake in public sector banks and financial institutions, while Rs 75,000 crore will be CPSE disinvestment receipts.
