New Delhi, Jan 11 (NationPress) The Confederation of Indian Industry (CII) has advocated for the Central government to expedite the privatisation of public sector enterprises as part of its recommendations for the Union Budget 2026–27. CII emphasizes the need for a strategic and measured approach to privatisation to realize the true potential of these enterprises.

Chandrajit Banerjee, the Director General of CII, stated, “The narrative of India’s growth is increasingly driven by private innovation and enterprise. An insightful privatisation strategy that aligns with the vision of Viksit Bharat will allow the government to concentrate on its primary roles while enabling the private sector to foster industrial growth and job opportunities.”

In this context, CII has urged for a swift implementation of the Government’s Strategic Disinvestment Policy, which aims to withdraw from all Public Sector Enterprises (PSEs) in non-strategic sectors while maintaining minimal involvement in strategic ones.

To enhance and hasten the privatisation process, CII has proposed a comprehensive four-part strategy.

Firstly, CII suggests adopting a demand-driven strategy for selecting PSEs for privatisation. Currently, the government identifies specific enterprises for divestment and then seeks investor interest. However, when there is insufficient demand or valuation, the process can stagnate. CII recommends reversing this order: first assessing investor interest across a wider range of enterprises and then prioritizing those that draw more interest and meet valuation criteria. This method, according to CII, would facilitate smoother execution and improve price discovery.

Secondly, to offer potential investors better clarity and planning, CII proposes that the government disclose a rolling three-year privatisation schedule, detailing which enterprises are expected to be privatized during this timeframe. This transparency would promote deeper investor participation and lead to more realistic valuations.

Thirdly, establishing an institutional framework could enhance oversight, accountability, and investor trust, making the privatisation process more predictable and professionally managed. CII recommends forming a dedicated body with a Ministerial Board for strategic oversight, an Advisory Board comprising industry and legal experts for independent evaluation, and a professional management team to manage execution, due diligence, market engagement, and regulatory coordination.

Additionally, CII has suggested a systematic disinvestment strategy paired with a three-year roadmap as a temporary measure. The government could gradually reduce its stake in listed PSEs to 51 percent initially, allowing it to remain the largest shareholder while unlocking substantial market value. Over time, this stake could further decrease to between 33 and 26 percent.

CII estimates that lowering the government’s stake to 51 percent in 78 listed PSEs could release nearly Rs 10 lakh crore. In the initial two years of this roadmap, the disinvestment plan could aim for 55 PSEs where the government holds 75 percent or less, potentially generating about Rs. 4.6 lakh crore. In the next phase, 23 PSEs with higher government stakes (over 75 percent) could be divested, which might yield an additional Rs 5.4 lakh crore.

These strategies are expected to bolster investor confidence, ensure transparent and predictable processes, and maximize value realization for the government. By prioritizing governance, regulation, and enabling infrastructure while allowing competitive markets to enhance efficiency, strategic privatisation can free up public resources for critical sectors like health, education, and sustainable infrastructure, while keeping a minimal presence in strategic sectors to support a self-sufficient and globally competitive economy.