Banking, power, oil strategic PSU sectors

The government has classified banking, power and petroleum sectors as strategic under the strategic disinvestment policy, the details of which were released today in the Union Budget for 2021-22 (Apr-Mar).

Atomic energy, space, defence, transport, telecommunications, coal, other minerals, insurance, and financial services are the other sectors that have been categorised as strategic under the policy.

In May, the government had proposed a new public sector enterprises policy under which state-owned units were to be classified as strategic and non-strategic. It had said it will privatise all public sector companies in non-strategic sectors and reduce the number of state-owned companies in the strategic sector to a maximum of four. According to the details of the policy released today, the government said that there will be "bare minimum" presence of public sector enterprises in strategic sectors.

"The remaining CPSEs (central public sector enterprises) in the strategic sector will be privatised or merged or subsidised with other CPSEs or closed," the government said.

"In non-strategic sectors, CPSEs will be privatised, otherwise shall be closed." The new policy will be key for the government to achieve its disinvestment target of 1.75 trln rupees in 2021-22, after it fell woefully short of its aim for receipts from disinvestment in the current financial year.