In its recommendations for the Union Budget 2026-27, CII urged the government to gather resources through a measured approach to privatisation, emphasizing sectors where private involvement can improve efficiency, integrate technology, and boost global competitiveness, thereby supporting capital expenditure and addressing developmental needs amidst global economic uncertainties.
The Confederation of Indian Industry (CII) has called on the Centre to outline a rolling three-year privatisation timeline, specifying which enterprises are expected to be divested during this timeframe, acknowledging that the complete privatisation of all non-strategic PSEs is a complicated and time-intensive task.
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It contended that such transparency would promote deeper investor engagement and provide more realistic valuation and price discovery, facilitating the privatisation process.
“The government could gradually reduce its stake in listed PSEs to 51% initially, maintaining its position as the single largest shareholder while unlocking substantial market value. Over time, this stake could further decrease to between 33% and 26%,” CII remarked.
According to its analysis, lowering the government’s stake to 51₹ in 78 listed PSEs could release nearly ₹10 lakh crore.
In the first two years of the plan, the disinvestment strategy could aim for 55 PSEs where the government holds 75₹ or less, generating approximately ₹4.6 lakh crore.
In the next phase, 23 PSEs with larger government stakes (over 75%) could be divested, possibly yielding ₹5.4 lakh crore, it stated.
“A systematic reduction of the government’s stake in listed PSEs to 51 per cent and even lower represents a pragmatic move that balances strategic oversight with value generation. Unlocking around ₹10 lakh crore of productive capital would furnish essential resources to expedite physical and social infrastructure development and support fiscal stability,” noted CII Director General Chandrajit Banerjee.
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The industry lobby believes that by concentrating on governance, regulation, and enabling infrastructure while permitting competitive markets to foster efficiency, strategic privatisation can free up public resources for critical areas such as health, education, and green infrastructure.
“India’s growth narrative is increasingly driven by private enterprise and innovation. A proactive privatisation policy, aligned with the vision of Viksit Bharat, will enable the government to concentrate on its core functions while empowering the private sector to spur industrial transformation and job creation,” it stated.
CII recommended hastening the execution of the government’s strategic disinvestment policy, which aims to exit all Public Sector Enterprises (PSEs) in non-strategic sectors and maintain minimal involvement in strategic ones.
Advocating for a shift to a demand-based approach in selecting PSEs for privatisation, the industry lobby mentioned that the government currently selects specific enterprises for sale and then solicits investor interest. However, when adequate demand or valuation is not realized, the process often stalls.
CII suggested reversing this order by first assessing investor interest across a wider array of enterprises and then prioritizing those that generate stronger interest and meet valuation criteria.
This strategy, it believes, would ensure more streamlined execution and improved price discovery. Structured feedback from potential investors could also alleviate procedural or regulatory obstacles.
It also recommended establishing an institutional framework to bolster oversight, accountability, and investor assurance, making privatisation predictable and professionally managed.
It called for the creation of a dedicated body with a ministerial board for strategic direction, an advisory board comprising industry and legal experts for independent benchmarking, and a professional management team to handle execution, due diligence, market outreach, and regulatory coordination.
This framework would also keep track of market trends, stakeholder opinions, and post-privatisation performance to facilitate ongoing improvement.
