An Air India passenger flight prepares to land.
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India is “back on track” in its efforts to divest state-owned companies after delays caused by the coronavirus pandemic, according to a top Treasury official.
The country has a divestment target of rupees 1.75 trillion (about $ 24 billion) for the next fiscal year, which begins April 1, said Treasury Secretary Nirmala Sitharaman in her budget announcement last month.
This means that the government is exiting itself by selling state-owned assets to the private sector or listing them on the stock exchange.
“In fact, there was a lot of prep work going on, but we had interruptions due to Covid. The divestment plan is back on track,” said Tuhin Kanta Pandey, Secretary of Investment and Public Asset Management, in an interview on CNBC’s Streets “Signs Asia” on Tuesday.
“We have several transactions planned and we hope these deals continue this year,” he added.
In her budget speech, Sitharaman emphasized that the Indian government wants to privatize state-owned companies such as the national airline Air India and the oil and gas giant Bharat Petroleum Corporation, among others. It also proposed the privatization of two public sector banks and a general insurance company.
Although the aviation industry has been badly hit by the coronavirus pandemic, Pandey said the government is making progress on its privatization plan for Air India.
“The aviation industry is recovering quickly and Air India’s divestment plan has been on track for some time. We are moving forward with the expression of interest and the process is now in the second phase,” he noted.
According to Pandey, the Indian government intends to sell all of its stake in the national airline.
“The Air India divestment is 100%. That means the government has no stake in it,” he said, adding that the goal is to close the sale by June.
India’s ability to meet its divestment goal would also depend on the successful public offering of the state-owned Life Insurance Corporation (LIC) in India.
The Securities and Exchange Board of India last month relaxed public issuance norms to make it easier for the government to sell part of its stake in India’s largest insurer through a public listing. The IPO is expected this year.
“LIC is on target to go public. This is one of the largest financial institutions we have and work on it continues,” said Pandey.