Narendra Modi’s government aims to secure up to US$6.23 billion in privatization revenues by 2023

The Indian government, led by Prime Minister Narendra Modi, aims to raise US$6.23 billion through privatization by 2023.

This initiative is intended to address the fiscal deficit and fund vital public works projects, particularly the expansion of water infrastructure to increase access to drinking water.

India is transitioning to a market economy, reducing direct state involvement in production and focusing on privatizing state-owned enterprises.

The government’s Public Sector Unit Disinvestment Program involves selling partial shares and fully privatizing government-run companies.

The 2023 budget targets US$6.23 billion in revenues from privatization, the highest amount since 2019.

Previous successful divestments include Hindustan Petroleum, a 51% stake in IDBI Bank, Air India, and management of international airports through public-private partnerships.

Upcoming plans include selling the remaining 49% stake in IDBI Bank, privatizing Shipping Corp India, and reducing the state’s shareholding in BEML Limited.

These measures will further reduce the fiscal deficit and generate funds for public works.

Privatization is crucial as state-owned enterprises contribute significantly to the fiscal deficit.

The proceeds from asset sales finance public works projects, with a focus on expanding water infrastructure for improved access to drinking water.

Progress has been made in water access, with a significant increase in rural households served.

From August 2019 to December 2021, the percentage of rural households with access to drinking water tripled to 45.2%.

The government aims to achieve 100% coverage by the following year, aided by public-private partnerships.

Prime Minister Modi emphasizes that funds from privatization will be allocated to social welfare schemes, including housing for the underprivileged, schools, village roads, and clean water.

The government believes these decisions will empower the Indian population and contribute to their well-being.