The Confederation of Indian Industry (CII) has urged the government to fast-track the privatisation of public sector enterprises (PSEs) to unlock substantial resources for infrastructure and address key development priorities amid global economic uncertainties. In its pre-Budget recommendations for the Union Budget FY27, CII estimated that this could release nearly ₹10 lakh crore in total.
Highlighting the strategic importance of privatisation in the current global economic landscape, CII Director General Chandrajit Banerjee said: “India’s growth is increasingly driven by private enterprise and innovation. A forward-looking privatisation policy will allow the government to focus on its core responsibilities while enabling the private sector to drive efficiency, technology adoption, and job creation.”
CII called for faster implementation of the Strategic Disinvestment Policy, which envisages a complete exit from non-strategic PSEs and only a minimal presence in strategic sectors. To achieve this effectively, the industry body proposed a four-pronged strategy.
Four-Pronged Strategy
It suggested shifting to a demand-based model: first gauging investor interest across a broad set of enterprises, then prioritising those with strong demand and realistic valuations, thereby reversing the current supply-driven approach that frequently stalls transactions.
CII also recommended introducing a rolling three-year privatisation pipeline to provide investors with greater visibility, encourage deeper engagement, and improve price discovery.
Additionally, the industry body proposed establishing a dedicated institutional framework comprising a ministerial board for oversight, an advisory board of experts, and a professional execution team to ensure transparency, accountability, and continuous improvement.
Two-Stage Calibrated Approach
As an interim measure, CII suggested calibrated disinvestment in listed PSEs, initially reducing the government’s stake to 51% (while retaining majority control) and later to 33–26%. According to CII’s analysis, reducing the government’s stake to 51% in 78 listed PSEs could unlock close to ₹10 lakh crore.
In the first two years of the proposed roadmap, the disinvestment strategy could target 55 PSEs where the government currently holds 75% or less, potentially mobilising around ₹4.6 lakh crore. In the subsequent stage, 23 PSEs with higher government stakes (over 75%) could be addressed, potentially yielding another ₹5.4 lakh crore.
Banerjee said this pragmatic approach balances strategic control with value creation, releasing capital for high-priority areas such as health, education, green infrastructure, and physical development while supporting fiscal discipline in a volatile global environment.