Good news on the economy.
You must have heard many such incidents recently where it is claimed that the government will privatise all government companies. But the real problem is something else – a plan by PM Modi has put all these claims into doubt. In fact, the Modi government had drawn up an ambitious plan for privatisation of government companies. It was believed that if the government was formed for the third time, it could move forward quickly. But now the government has indicated that it will back out from this plan. PM Modi has told what his plan is regarding government companies. Let us know who the Modi government will focus on.
What is Prime Minister Modi’s plan?
Quoting Reuters in the Economic Times, it has been said that the government is working on a plan to improve the profits of over 200 government-owned companies. This is an indication that the Modi government is preparing to discontinue the privatisation programme. The Modi government had announced an ambitious plan for 2021 to privatise a large part of the public sector worth $600 billion.
The pace had slowed even before the election.
Before the April-May general elections, the government’s progress on this front had slowed down. In these elections, the BJP failed to secure a majority on its own and is dependent on its partners in the NDA alliance to run the government. According to sources, Finance Minister Nirmala Sitharaman may announce a new plan in the budget to be presented on July 23. This includes selling off a large chunk of unused land held by companies and monetising other assets. It aims to raise $24 billion in the current fiscal year and reinvest it in companies. Five-year performance and production targets will be set for each company instead of short-term targets.
The focus will be on these
The Finance Ministry did not respond to requests for comment. In the interim budget presented in February before the election, the government did not provide data on stake sales for the first time in more than a decade. An official said the government is now shifting its focus from indiscriminate asset sales to increasing the intrinsic value of its companies. The government also wants to initiate a succession plan in its majority-owned companies. In addition, there is also a proposal to train 230,000 managers to prepare them for senior positions in these companies.
