Government readies disinvestment strategy

Indian government may announce the blueprints of its disinvestment plans within next couple of weeks. A departmental note in this regard has been prepared by the department of disinvestment which is likely to be circulated in the cabinet soon. The plan will be reviewed by the cabinet committee on economic affairs (CCEA) before being finalised.

Government is in the middle of finalising its revised disinvestment policy after its stake sale attempts in the last term were hindered by its left wing allies. However, since the government has come back with a strong mandate this time and without the support of left parties, it has cleared its intentions of taking the disinvestment agenda ahead.

Government’s intentions on the disinvestment policy were cleared in the Annual Survey released before the presentation of the union budget which recommended a high profile stake sale strategy in order to raise resources for investing in the infrastructure sector, an exercise mandatory for India to continue its high growth trajectory enjoyed in 3-4 fiscal before FY09.

The finance ministry had therefore asked the department of disinvestment to prepare an in-depth strategy to further the disinvestment agenda. Finance minister Pranab Mukherjee is now expected to have a meeting with the department in order to finalise the note on the new disinvestment policy. After that the note will be discussed in the CCEA and a final approval will be sought from the PMO before making it public.