New Delhi: Changing paths is helpful, but going out-of-the-box is not always beneficial. This is the story of the privatization of two of India’s largest public sector companies Air India and Bharat Petroleum (BPCL). After nearly two decades in the country, this year saw a historic disinvestment. In this, loss-making national airline Air India was sold to Tata. This was possible only because the government decided to dilute the route of 76 per cent stake in the national airline to sell the entire 100 per cent stake and at the same time give the bidders a choice of how much loan they want to take on.
However, in the case of BPCL, the government offered its entire 52.98 per cent stake in the company, ignoring suggestions to follow the successful policy of retaining 26 per cent stake, including control over the management. The result was that only three tenders came in and even two of them struggled to arrange finances. In such a situation, the process of disinvestment of Air India became possible but not of BPCL.
read also
The biggest disinvestment in India’s history is likely to take place in the January-March quarter of 2022 when the country’s largest insurance company Life Insurance Corporation of India (LIC) will go for an initial public offering (IPO). At present, the government has 100% stake in LIC. However, the biggest achievement of 2021 was that the stigma on privatization, which was described as an act of selling the country’s wealth, was removed and the feeling that privatization is helpful in saving taxpayers’ money .
The year 2021 has been historic in many ways in terms of the government’s disinvestment programme. First because it was the first privatization in 19 years. The last process of privatization was earlier in 2003-04. Air India and Central Electronics Limited were privatized this year. Air India was bought by the Tata group for Rs 18,000 crore and Central Electronics under the Ministry of Science and Technology was bought by Delhi-based Nandal Finance & Leasing for Rs 210 crore.
Five of the Central Public Sector Undertakings (CPSEs) are in the process of privatization which include BPCL, BEML, Shipping Corporation, Pawan Hans and NINL. Alliance Air and three other Air India subsidiaries will also be privatized during 2022. In the budget for 2021-22, a target of raising Rs 1.75 lakh crore has been set through disinvestment. (agency)