Table of Contents
What has happened?
- The govt on Monday budgeted Rs 1.75 lakh cr from stake sale in public sector companies and financial institutions,
- Including 2 PSU banks and one general insurance company, in the next fiscal year beginning April 1.
Reactions from opposition
- The Union Budget for financial year 2021-’22 evoked contrasting reactions, with the opposition parties criticising it and calling it a pro-corporate move,
- While the Bharatiya Janata Party leaders and Cabinet ministers hailing it as a vision for an “Aatmanirbhar Bharat”.
- West Bengal Chief Minister Mamata Banerjee said that the Budget was anti-poor.
- “They [Bharatiya Janata Party] lectures others on nationalism, but in practice, they are the ones who are selling the nation,” she said.
- “They are selling everything from PSUs [Public Sector Undertakings], Insurance, Railways and Ports. This is a Budget to deceive the masses. It’s an anti-farmer, anti-people and anti-country Budget.”
- Rashtriya Janata Dal leader Tejashwi Yadav said that the 2021 Budget was not for the development of India, but for its sale.
- “Earlier, they sold Railways, Air India, Bharat Petroleum, and others,” he added.
- “This Budget is about more such entities that will be sold including gas pipeline, stadium, roadways and warehouses.”
Disinvestment targets
- The amount 1.75 lakh cr is lower than the record Rs 2.10 lakh cr which was budgeted to be raised from CPSE disinvestment in the current fiscal year.
- However, the COVID-19 pandemic impacted the government’s CPSE stake sale programme, and the target has been lowered to Rs 32,000 cr in the Revised Estimates.
- So far this fiscal year, the government has mopped up Rs 19,499 cr from CPSE stake sale and share buyback.
- For fiscal year 2021-22, out of the total Rs 1.75 lakh cr,
- Rs 1 lakh cr is to come from selling government stake in public sector banks and financial institutions.
- Rs 75,000 cr would come as CPSE disinvestment receipts.
Strategic sectors
- Unveiling the Disinvestment/Strategic Disinvestment Policy, Finance Minister Nirmala Sitharaman said,
- Four sectors — Atomic energy, Space and Defence; Transport and Telecommunications; Power, Petroleum, Coal and other minerals; and Banking, Insurance and financial services –
Would be strategic sectors.
- In strategic sectors, there will be bare minimum presence of the public sector enterprises.
- The remaining CPSEs in the strategic sectors will be privatised or merged or subsidiarized with other CPSEs or closed.
- In non-strategic sectors, CPSEs will be privatised, otherwise shall be closed.
Companies that are being privatised
- In her 2021-22 Budget speech, she said strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam Ltd, among others would be completed in 2021-22.
- Privatisation will reduce fiscal pressure as the Centre has been infusing capital year after year even though market valuation of government-owned banks has shrunk.
- Post disinvestment, economic growth of Central Public Sector Enterprises (CPSEs)/ financial institutions will be through,
- Infusion of private capital, technology and best management practices.
- Will contribute to economic growth and new jobs
How many PSUs in India?
- There were around 300 Public Sector Enterprises (PSEs) in India as on March 31, 2019.
- To fast-track the disinvestment policy, NITI Aayog would work out on the next list of central public sector companies that would be taken up for strategic disinvestment.
Q) Which one of the following is likely to be the most inflationary in its effect?
- Repayment of public debt
- Borrowing from the public to finance a budget deficit
- Borrowing from banks to finance a budget deficit
- Creating new money to finance a budget deficit
Budget 2021 – 2022 | Free PDF
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