Niti Aayog: Only a few PSUs to remain in strategic sectors, says Niti Aayog CEO

NEW DELHI: Niti Aayog CEO Amitabh Kant says there will be a few PSUs in strategic sectors once the public sector policy is rolled out and the Budget for 2021-22 has sent out a strong message about government‘s reformist zeal. Excerpts:

There is a huge thrust on privatisation in Budget. Niti Aayog has worked on PSU privatisation policy. What is the strategy?

The key challenge before the country is to enhance gross capital formation and this means private sector investment must rise. This necessitates that we bring in the private sector in areas where revenue streams are coming in. One key area was we push for asset monetisation in a very big way. The second big area was we push for privatisation so that there is overall enhancement of total factor productivity. This is very important if you have to grow at high rates on a sustained basis.

The challenge before the Budget makers was not that we go back to pre-Covid levels but we accelerate the pace of growth to 8%-9%. That means we should continue to grow over long period of time by sheer efficiency and while Niti Aayog has already given five different sets of recommendations on disinvestment, many of which are at advanced stages, some were impacted due to Covid-19.

But now the government is absolutely clear, which has been announced in the Budget that there will be only four key strategic sectors and in these key strategic sectors, there will be maximum of three or four public sector enterprises. In other areas, where there are PSUs, the government will get out of businesses and therefore there will be few public sector enterprises, in strategic areas only.

In others, the government will bring in private sector enterprises and therefore there is a huge challenge before the country that we must be able to follow all due processes and we must be able to attract the best bids for these PSUs. Beyond the four sectors, every other area, the intention is that we should be able to bring in huge amount of private sector investment, enhance productivity and take India to a high growth trajectory.

Budget said only few companies in strategic areas will remain. What is the time frame?

We will immediately get down to this and very shortly Niti Aayog will do a complete analysis and make its recommendations. We are doing a lot of home work and we will do all the inter-ministerial consultations and based on those consultations with the ministry of finance and concerned ministries we will take a call on this as early as possible.

How do you ensure that monopolies don’t come up, for example, in steel or heavy engineering?

Our objective should be two-fold. One is we should maximise value for government, which should be the key. Second, in majority of the sectors in which the public sector is operating, there are a vast number of private sector players both in India and abroad. If these deals are well structured – and I think that is the key challenge before the government to do due diligence, structure these deals well, promote these projects abroad and in India extensively and you will get a vast number of players and I do not see any monopoly in any one of these areas. There is no monopolistic character, there are a vast number of players, including in steel and many minerals sectors both in India and abroad, to bid for these PSUs.

There has been a criticism that you are selling family silver and depending too much on privatisation to raise funds to boost growth…

The greatest thing about this Budget to my mind is the reformist zeal which this government has demonstrated that it is willing to take on this criticism and accelerate the pace of growth. It is willing to make major structural reforms, which it did through a series of announcements under the Atmanirbhar package, major structural reforms which the country had not seen before and continues that pace in this Budget and send out a clear message that it is willing to touch hitherto untouched areas. It has sent out a clear message that this government is committed to long-term growth of India, rather than handing out mere doles.

When do you see private investment picking up?

I would give it close to about five-to-six months from the time all the PLIs (production-linked incentives) are announced. I have already seen investments picking up in both mobile and telecom. PLIs are close to about $26 billion, it should logically lead to enhanced production of over $500 billion in five years.