Executive Summary:
This document is the response to Lok Sabha Unstarred Question No. 179 regarding the disinvestment of loss-making Public Sector Undertakings (PSUs). It details the government's disinvestment targets and achievements over the past five years, strategic disinvestment of PSUs, and the approach to disinvesting in Public Sector Banks (PSBs). The information is provided by the Minister of State in the Ministry of Finance.
Key Points / Main Content:
Disinvestment Targets and Achievements:
* Revised Estimate (RE) and Actual Realization of disinvestment proceeds for the last five years are provided.
* Specific disinvestment targets have been discontinued since the Revised Estimate (RE) of FY 2023-24.
* Miscellaneous Capital Receipts include estimated receipts from equity investments and public assets management.
* Rs. 30,000 crore for RE 2023-24
* Rs. 33,000 crore for RE 2024-25
* Rs. 47,000 crore for BE 2025-26
Disinvestment Methods:
* Minority Stake Sale: Through SEBI-approved methods like IPO, OFS, Buyback of shares.
* Strategic Disinvestment: Sale of substantial government shareholding with transfer of management control.
Policy on Strategic Disinvestment:
* Government aims to minimize presence in sectors where competitive private sector is mature.
* Strategic investors can enhance the economic potential of entities through capital infusion, technology upgrades, and efficient management.
* Profitability/loss is not the primary criterion for strategic disinvestment.
Strategic Disinvestment of CPSEs:
* CPSEs strategically disinvested in the last four years:
* 2021-22: Air India and its subsidiary AIXL and AISATS JV (Loss-making)
* 2022-23: Neelachal Ispat Nigam Limited (NINL) (Loss-making)
* 2024-25: Ferro Scrap Nigam Limited (FSNL), a subsidiary of MSTC Ltd. (Profit-making)
Disinvestment in PSBs:
* IDBI Bank is undergoing strategic disinvestment with transfer of management control.
* Minority stake sales in other PSBs are conducted via SEBI-approved methods based on market conditions.
* Objectives include unlocking value, promoting public ownership, and meeting minimum public shareholding requirements.
* Disinvestment depends on administrative feasibility, market conditions, economic outlook, and investor interest, making it difficult to anticipate actual proceeds.
Impact Analysis:
Government:
* Impact: The government aims to streamline its involvement in various sectors, generate revenue through disinvestment, and improve the efficiency of PSUs.
* Action Required: Continue to execute disinvestment strategies based on market conditions and investor interest.
Public Sector Enterprises (PSEs):
* Impact: Some PSEs may undergo changes in management and operations due to strategic disinvestment, potentially leading to improved efficiency and growth.
* Action Required: Cooperate with the disinvestment process and adapt to potential changes in management and operational strategies.
Investors:
* Impact: Investors have opportunities to acquire stakes in PSUs, potentially benefiting from their growth and improved performance.
* Action Required: Evaluate investment opportunities in disinvested PSUs based on market conditions and their individual investment strategies.
General Public:
* Impact: Increased public ownership in PSBs and improved efficiency of disinvested entities can lead to better services and economic growth.
* Action Required: Stay informed about the disinvestment process and its potential impact on the economy.
Key Entities Referenced
Ministry of Finance: A department of the Government of India responsible for financial matters.
Department of Investment and Public Asset Management: A department under the Ministry of Finance, Government of India, responsible for managing government investments and public assets, including disinvestment.
Public Sector Enterprises: Companies in which the majority stake is held by the government.
Air India: An airline that was strategically disinvested by the Government of India.
Neelachal Ispat Nigam Limited: A steel plant strategically disinvested by the Government of India.
IDBI Bank: A Public Sector Bank under strategic disinvestment with transfer of management control.
SEBI: Securities and Exchange Board of India
Ferro Scrap Nigam Limited: A subsidiary of MSTC Ltd that was strategically disinvested.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF INVESTMENT AND PUBLIC ASSET MANAGEMENT
LOK SABHA
UNSTARRED QUESTION NO. 179
TO BE ANSWERED ON MONDAY, JULY 21, 2025
ASHADHA 30, 1947 (SAKA)
Disinvestment of Loss Making PSUs
179. Shri Rao Rajendra Singh:
Will the Minister of FINANCE be pleased to state:
(a) the details of targets and achievements made by the Government through
disinvestment process during the last five years;
(b) whether the Government has been successful in making disinvestment of its stakes
in loss-making PSUs during the last three years and if so, the details thereof; and
(c) the names of PSUs, especially Public Sector Banks (PSBs) which the Government
proposes to disinvest along with the amount likely to be received therefrom and the
reasons due to which the Government is contemplating to disinvest from such
organisations?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a): Revised Estimate and Actual Realisation of disinvestment proceeds for the last
five years are given as under:
(Rs. crore)
Year Actual
Revised Estimate (RE)
Realisation
2020-21 32,000 32,886
2021-22 78,000 13,534
2022-23 50,000 35,294
2023-24 16,507
1Year Actual
Revised Estimate (RE)
Realisation
There is no specific
2024-25 10,163
target for disinvestment
rece ipts
Fixing separate disinvestment targets has been discontinued since the Revised
Estimate (RE) of FY 2023-24. However, Rs. 30,000 crore, Rs.33,000 crore and
Rs.47,000 crore kept under Miscellaneous Capital Receipts for RE 2023-24, RE
2024-25 and BE 2025-26 respectively, which includes estimated receipts on account
of management of equity investments and public assets through various
mechanisms.
(b) & (c): Government carries out disinvestment in Public Sector Enterprises (PSEs)
through (i) Minority Stake Sale through various SEBI-approved methods such as
Initial Public Offer (IPO), Offer for Sale (OFS), Buyback of shares etc. and (ii)
Strategic Disinvestment i.e. entire or substantial sale of Government shareholding to
a strategic buyer along with transfer of management control.
The policy on strategic disinvestment/privatization is based on the economic principle
that Government should minimize presence in sectors, where competitive private
sector has come of age and economic potential of such entities may be better
discovered in the hands of strategic investor due to various factors such as infusion
of capital, technological upgradation, efficient management practices etc.
Profitability/loss is not among the relevant criteria for privatization/strategic
disinvestment. The following CPSEs were strategically disinvested during the last
four years.
Profit /Loss
S.
Financial
Name of the CPSE /Entity making at the time
No
Year
of privatisation
2021-22
Air India and its subsidiary AIXL and
1 Loss making
AISATS(JV)
22022-23 Neelachal Ispat Nigam Limited
2 Loss making
(NINL)
2024-25 Ferro Scrap Nigam Limited (FSNL),
3 Profit making
a subsidiary of MSTC Ltd.
As far as PSBs/Banks are concerned, the IDBI Bank is under strategic disinvestment
with transfer of management control. For other PSEs/Banks, disinvestment through
minority stake sale is carried out through various SEBI-approved methods from time
to time based on prevailing market conditions in order to unlock the value, promote
public ownership and meet the minimum public shareholding to ensure higher degree
of accountability.
Disinvestment transaction depends upon administrative feasibility, market
conditions, economic outlook and investor interest. In view of this, it is difficult to
anticipate quantum of actual proceeds from disinvestment during the current
Financial Year.
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