The government will press ahead with the sale of public sector companies that have been approved by the Cabinet, Finance Minister Nirmala Sitharaman said on Thursday. Highlighting that FDI flow into India is much higher compared to other emerging economies, she said India's strong macroeconomic fundamentals, ability to do reforms and a stable government help attract long-term foreign funds into Indian businesses.
"Even during the pandemic, our efforts to disinvest some of those big companies are going on fine. The EoIs have come in, the next stage is going on and even within this financial year. I expect DIPAM to be able to prove that they are even more actively engaging in those disinvestments for which cabinet has already given approval," Sitharaman said while addressing the AGM of the Indian Chamber of Commerce and Industry (ICC). The government has set an ambitious Rs 2.01 lakh crore disinvestment target in the current fiscal. However, COVID pandemic has derailed the stake sale plans and so far over Rs 11,006 crore has been mopped up from minority stake sale in various CPSEs.
The Cabinet has approved strategic sale, along with transfer of management control, in over 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 of SAIL. The process of sale of 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 several measures to support the economy but no amount of intervention will be adequate to deal with the crisis triggered by the COVID-19 pandemic. The finance minister said public expenditure will continue particularly for infrastructure and with the tax concessions that the government has doled out several sovereign funds and pension funds are keen to invest in infrastructure projects outlined in the National Infrastructure Pipeline (NIP).
"Today we are able to see with all the tax concessions that we have given, several sovereign funds and pension funds from abroad are keen to come to India, and that kind of an investment readiness explains why there is an inward FDI flow into India. Inward FDI flow into India is much, much higher in proportion than compared comparable economies, emerging economies… "So they (foreign funds) are committed to be here. They are coming in because our macroeconomic fundamentals are strong, even as there are challenges, but more importantly there is an elected stable government.
"A government which is looking at progressive reforms, a government which does not shy away from taking very strong decisions. And a government which has made very clear that the disinvestment agenda, for which the cabinet has given clearance, will go on," she said. Foreign Direct Investment (FDI) during April-September 2020, increased 13 per cent to about USD 40 billion.
With regard to Aatmanirbhar Bharat, the minister said the government does not want to support import of those goods or services which the domestic industry is producing and providing. "We are conscious that raw material support, intermediary goods support will have to carry on, we will continue with that," she said.
The minister said post lockdown every department of the government is functioning with a greater element of "wanting to be nimble" and asked the industry to give their suggestions. "…We are seeing clear signs of revival across the board, but for it to sustain I need to understand from you, the industry leaders, as to what exactly you are looking at…" "Even as we are going towards the making of the next Budget after an extraordinary year, challenges have been very different.
" Public expenditure will continue and at a better pace. Public expenditure meaning capital expenditure from the public sector undertakings, particularly for infrastructure will be kept up. Government's expenditure and for infrastructure is something which we are very much into…," Sitharaman added.