- Friday, April 19, 2024
By: Shubham Ghosh
THE Confederation of Indian Industry (CII) on Monday (11) said privatisation of national carrier Air India gives a clear message to the markets and global creators that the Narendra Modi government has the political will to bite the reform bullet.
The chamber said the time was appropriate to expedite disinvestment efforts in the banking sector, with privatisation of two identified public sector banks.
“Air India’s successful sell-off, albeit after multiple efforts, will infuse a fresh vigour to the ambitious plan of disinvestment and privatisation of public sector enterprises,” CII director General Chandrajit Banerjee said.
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He stated it will help embolden confidence in the government’s capacity to close transactions and thus encourage bidding in future sales.
“This impetus was much required as the government is lagging in its disinvestment plans with only around 5 per cent of the annual target laid out in the Union Budget met so far till August 2021,” the chamber said.
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On Friday (8), the government announced national conglomerate Tatas have secured the bid to acquire the debt-ridden Air India for Rs 18,000 crore (£1.7 billion). The deal, which is expected to be completed by the end of December, also includes sale of Air India Express and ground handling arm AISATS.
The government has budgeted Rs 1.75 lakh crore (£17 billion) from stake sale in public sector companies and financial institutions, including two PSU banks and one insurance company, in the current financial year.
In her budget speech in February, Indian finance minister Nirmala Sitharaman announced that the government proposes to take up privatisation of two public sector banks and one general insurance company in the year 2021-22.
The chamber said the sale of Air India marked a watershed event for the policy discourse on disinvestment and privatisation in India.
“The successful privatization of Air India marks a momentous event and sends out a clear message to the markets and global investors that the present government has the political will to bite the reform bullet,”Banerjee said, adding, “The move also amply demonstrates the trust which the government reposes in private sector by bringing them centre stage with its bold privatization programme.”
