The government will go ahead with the sale of public sector companies that have been approved by the Cabinet, Finance Minister Nirmala Sitharaman said on Thursday.
Noting that the flow of FDI to India is much higher compared to other emerging economies, he said that India’s strong macroeconomic fundamentals, the ability to make reforms and a stable government help attract long-term foreign funds to Indian companies.
“Even during the pandemic, our efforts to divest some of those big companies are going well. The Edi have entered, the next stage is underway and even within this exercise. I hope that DIPAM can show that they are getting even more actively involved in those divestments for which the cabinet has already given its approval, ”said Sitharaman while addressing the General Meeting of Shareholders of the Indian Chamber of Commerce and Industry (ICC ).
The government has set an ambitious divestment target of Rs 2.01 crore lakh in the current fiscal year. However, the Covid pandemic has derailed the plans for the sale of stakes and so far more than 11,006 crore has been removed from the sale of minority stakes in various CPSEs.
The Cabinet approved the strategic sale, along with the transfer of management control, in more than 25 public sector companies, including Air India, BPCL, Pawan Hans, Scooters India, Bharat Earth Movers Ltd (BEML), Shipping Corporation, Cement Corporation and some steel plants. by SAIL.
The sale process for BPCL and Air India is ongoing and the government has received “multiple expressions of interest” in these two companies.
Sitharaman mentioned that the government has taken various measures to support the economy, but no amount of intervention will be adequate to deal with the crisis brought on by the Covid-19 pandemic.
The finance minister said that public spending will continue particularly in infrastructure and with the tax concessions that the government has granted, several sovereign funds and pension funds are willing to invest in infrastructure projects described in the National Infrastructure Pipeline.
“Today we can see that with all the tax concessions that we have given, various sovereign wealth funds and pension funds from abroad are eager to come to India, and that kind of willingness to invest explains why there is a flow of FDI to India. The flow of FDI to India is much, much higher in proportion than comparable economies, emerging economies …
“So they (foreign funds) are committed to being here. They are coming in because our macroeconomic fundamentals are strong, even when there are challenges, but more importantly, there is a stable elected government.
“A government that is seeking progressive reforms, a government that does not shy away from making very strong decisions. And a government that has made it very clear that the divestment agenda, for which the cabinet has given the go-ahead, will continue, “he said.
Foreign Direct Investment (FDI) during April-September 2020 increased 13% to approximately $ 40 billion.
Regarding Aatmanirbhar Bharat, the minister said that the government does not want to support the import of those goods or services that the national industry is producing and providing.
“We are aware that support for raw materials, support for intermediate goods will have to continue, we will continue with that,” he said.
The minister said that after the closure all government departments are operating with a greater element of “wanting to be agile” and asked the industry to give their suggestions.
“… We are seeing clear signs of revival across the board, but for it to continue, I need you, the industry leaders, to understand what exactly you are seeing …” “Even as we head towards La preparing the next Budget after an extraordinary year, the challenges have been very different.
“Public spending will continue and at a better pace. Public spending, that is, the capital expenditure of public sector companies will be maintained, especially in infrastructure. Government spending and infrastructure is something that interests us a lot … ”, added Sitharaman.
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