New Delhi: The Confederation of Indian Industry (CII) has urged the Central government to accelerate privatisation of Public Sector Undertakings (PSUs) and adopt a calibrated, market-driven strategy to unlock greater value and mobilise resources, as part of its recommendations for the Union Budget 2026–27.

CII Director General Chandrajit Banerjee said India’s economic momentum is increasingly being driven by private enterprise, innovation and industrial growth, and a forward-looking privatisation policy aligned with the vision of Viksit Bharat would allow the government to focus on core governance while enabling the private sector to spur job creation, investment, and economic transformation.

Call to speed up the strategic disinvestment policy

CII has called for faster implementation of the Government’s Strategic Disinvestment Policy, which proposes government exit from PSUs in non-strategic sectors while retaining a minimal presence in strategic areas.

To strengthen and streamline India’s privatisation programme, the industry body has proposed a four-pronged strategy.

Demand-based privatisation framework

CII recommended shifting to a demand-based privatisation approach, where investor interest is assessed first across a broader pool of PSUs before selecting entities for disinvestment. This, it said, would help avoid stalled transactions, ensure stronger valuation, and enable smoother execution with better price discovery.

Rolling three-year privatisation pipeline

To boost transparency and enhance investor confidence, CII proposed a rolling three-year privatisation roadmap, clearly listing PSUs likely to be taken up for disinvestment. Such predictable visibility, it said, would help investors plan capital deployment and improve valuation outcomes.

Strong institutional mechanism for privatisation

CII also suggested a robust institutional framework to make privatisation more predictable and professionally managed. This would include a dedicated execution body, a Ministerial Board for strategic guidance, an Advisory Board comprising industry and legal experts, and a professional management team to oversee due diligence, regulatory coordination and market engagement.

Phased disinvestment to unlock Rs 10 lakh crore

As an interim calibrated strategy, CII proposed a phased reduction of government stake in listed PSUs to 51 per cent initially, while retaining majority control and unlocking significant capital.

According to CII estimates:

• Reducing the government stake to 51 per cent in 78 listed PSUs could unlock nearly Rs 10 lakh crore.

• In the first two years, disinvestment in 55 PSUs where government holding is 75 per cent or below could mobilise Rs 4.6 lakh crore.

• In the next stage, disinvestment in 23 PSUs with higher government stakes could generate Rs 5.4 lakh crore.

Boosting investor confidence and economic growth

CII said accelerating strategic disinvestment would support transparent processes, stronger investor sentiment and maximised value realisation for the exchequer. The proceeds could be channelled towards healthcare, education, green infrastructure, and high-impact national development priorities, while maintaining a limited presence in key strategic sectors.

The industry chamber emphasised that speeding up PSU privatisation, strengthening governance reforms, and empowering competitive markets would help build a self-reliant, globally competitive Indian economy, reinforcing long-term sustainable growth.

IANS