The government is clear and unapologetic about privatisation of public sector enterprises as part of reforms, Principal Economic Advisor Sanjeev Sanyal said on Friday.
Last month, Finance Minister Nirmala Sitharaman had announced that there will be a maximum of four public sector companies in strategic sectors while state-owned firms in other segments will eventually be privatised.
This will be part of a new coherent Public Sector Enterprises Policy to be formulated to push reforms in central public sector enterprises (CPSEs), she had said while announcing the fifth and last tranche of over Rs 20 lakh crore 'Amtmanirbhar Bharat Abhiyan' package.
Talking about the Centre's privatisation drive, Sanyal said, "...we know that privatisation is difficult to do under these circumstances, but we want to be absolutely clear and unapologetic about what we want to do. All non-strategic PSUs (public sector undertakings) will be sold when we can do it. It's not lack of intent that will hold us back."
He further said that the Essential Commodities Act was considered as the "holiest of holy law and it was one of the 10 commandments" but the government has now changed it.
"Labour laws and others in 10 commandments, we are going to change it. We are changing it in a very peculiar way. We are actually going to tighten safety and working condition laws. We are actually introducing nationwide minimum wages. So it's not entirely as some people may claim tilted against the labour," he said.
The government is open to various suggestions including from labour unions to make laws more robust, he said while addressing a virtual AIMA event.
Earlier this week, the Union Cabinet approved an amendment to the six-a-and-half decade old Essential Commodities Act to deregulate food items, including cereals, pulses and onion, a move that will transform the farm sector and help raise farmers' income.
The Cabinet also approved 'The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020' to ensure barrier free trade in agriculture produce.
The government also approved 'The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020' to empower farmers to engage with processors, aggregators, wholesalers, large retailers and exporters.
Asked about steps to boost demand, Sanyal said the government is cognisant of the situation and as and when need arises, resources will be utilised to support it.
"I can assure you that we watch this very carefully and will be willing to use whatever space we have. As I said, we have some fiscal space, when we have quite a lot of monetary space. And there are other measures as well that can be thought of. We will do it when necessary," he said.
Citing an example, he said, a large pipeline of investment in infrastructure projects is planned for boosting demand and creating employment.
"It is a good opportunity. As we lower the cost of capital and with global capital being as cheap as it is, there is a case for putting together a pipeline of large investment projects. So, there are ways of doing this. Demand is not only about reviving consumption. The investment is an important part of building the cycle," he said.
Under the privatisation policy, a list of strategic sectors will be notified where there will be at least one and a maximum of four public sector enterprises, apart from private sector companies.
In other sectors, CPSEs will be privatised depending upon the feasibility.
The finance minister had last month said the government would announce a PSE policy as a self-reliant India needs a coherent policy. All sectors will be opened to private sectors also.
"PSEs will continue to play an important role in defined areas. We need a coherent policy because sometimes you open up some sectors in piecemeal... Now we shall define the areas...where their presence will be impactfully felt," Sitharaman had said.
The policy to privatise public sector companies is expected to give a boost to the government's disinvestment programme.
The Centre has set a budget target of Rs 2.10 lakh crore from disinvestment in the current fiscal, of which Rs 1.20 lakh crore is expected from CPSE disinvestment.