Tuesday, February 27, 2024

Government has no problem with privatization of SBI and ONGC, big statement of Nirmala Sitharaman

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Finance Minister Nirmala Sitharaman (File photo: PTI)

The government has no problem in disinvesting in the country’s largest bank, State Bank of India (SBI) and one of the country’s largest government companies, Oil and Natural Gas Corporation (ONGC). Finance Minister Nirmala Sitharaman has said this in an interview given to a private TV channel.

Finance Minister Nirmala Sitharaman says that the Indian government has no problem with disinvestment in all the blue chip government companies like SBI and ONGC. The government’s stance is not against remaining a minority stakeholder (less than 50 percent) in important public sector companies.

During the interview, when the Finance Minister was asked whether the government supports holding 49 percent or less stake in important companies like SBI and ONGC, the Finance Minister replied ‘yes’. Finance Minister Nirmala Sitharaman has given this statement immediately after presenting the budget, from which many meanings are being inferred.

DIPAM’s responsibility for disinvestment of government companies

According to the news of Money Control, Finance Minister Nirmala Sitharaman said that the Department of Investment and Public Asset Management (DIPAM) has gradually released the shares of many government companies in the market. So that private companies and retail investors can acquire these shares.

In recent years, the government has sold stake in many of its companies, but has sold controlling stake only in Air India to the Tata Group.

Target to earn Rs 50,000 crore from privatization in the budget

If we look at the government’s interim budget 2024-25, in this also the government has set a target of earning Rs 50,000 crore from disinvestment (privatization). The government is trying to do strategic disinvestment in various government companies. However, if we look at the figures of ‘DIPAM’, the department that oversees the disinvestment program of the government, it has earned Rs 12,504.32 crore from disinvestment in the current financial year 2023-24 also. This is only 24.5 percent of the government’s target of Rs 51,000 crore.

However, the government has been failing to achieve its disinvestment target since the financial year 2019-20. The government did not find suitable buyers for many of its companies such as Bharat Petroleum and Pawan Hans. So at the time of listing of LIC in the stock market, it could not get the valuation as per the government.

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