Budget 2023: Privatisation of more banks, other PSUs not on cards, say sources

In Budget 2023, the government may not focus on privatisation, rather the disinvestment target for 2023-24 will be less than the previous year.

Bank privatization and disinvestment targets wont be the priority list in this budget. (Image: Reuters)

There is hardly any chance that the government will announce the privatisation of any new company in the upcoming budget, said sources from the Ministry of Finance. They added that the revenue target of Department of Investment and Public Asset Management (DIPAM) is also likely to be reduced. DIPAM deals with matters related to management of government investments in equity including disinvestment of equity in public sector undertakings.

“It is unlikely that the government would announce privatisation of new companies in the budget,” sources told Zee Business Online.

Finance Minister Nirmala Sitharaman while presenting the previous budget had announced that two public sector banks would be privatised but didn’t confirm the names. She also mentioned about the Strategic Disinvestment of government's stake and also that of Life Insurance Corporation of India in IDBI Bank. However, the disinvestment of IDBI Bank is yet to be materislised.

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Sources said that the privatisation of two government banks and meeting the disinvestment target seemed to be challenging in the current fiscal.

Sources said that DIPAM's revenue target is also likely to be reduced from Rs 65000 crore to Rs 40000-45000 crore.

Ahead of the upcoming Budget, speculations are once again rife that the government could announce to privatise more banks.

The bank union bodies have been extremely critical of the government's decision. Their representatives had met Sitharaman in November and expressed their strong disagreement against privatisation.

Analysts and economists, however, suggest that privatisation can help the banking industry which was struggling badly with several bad loans and willful defaults after Covid-19.

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