CII Proposes ₹10 Lakh Crore Privatization Plan for Budget 2026-27

CII Proposes Privatization Roadmap for Union Budget 2026-27

The Confederation of Indian Industry (CII) has put forth a comprehensive four-stage strategy for faster and more predictable disinvestment in Public Sector Enterprises (PSEs) as part of its Union Budget 2026-27 recommendations. The industry body believes a structured privatization approach is key to sustaining capital expenditure and financing national development goals.

Demand-Led Selection Process

CII suggests shifting from a short-listing approach to a demand-led model. This involves measuring market appetite for a broader list of PSEs first, then identifying those with better investor interest and valuation for privatization. This ensures that sale efforts are focused on entities that are more likely to attract buyers.

Three-Year Privatization Pipeline

The industry group also called for the government to announce a rolling three-year privatization pipeline in advance. Greater visibility on future divestments would provide investors ample time for planning, deepen their participation, and facilitate better price discovery for state-owned assets. This predictability is crucial for attracting long-term investment.

Dedicated Institutional Mechanism

To streamline the complex process of exiting non-strategic PSEs, CII proposed establishing a dedicated institutional mechanism. This structure would comprise a ministerial board for strategic oversight, an advisory panel of industry and legal experts, and a professional execution team to manage due diligence, market engagement, and regulatory coordination effectively.

Calibrated Disinvestment for Value Unlock

Acknowledging the challenges in complete privatization, CII advocated for a calibrated disinvestment route as an interim strategy. This involves initially reducing the government's stake in listed PSEs to 51%, thereby retaining management control, before further reducing it to between 33% and 26%. CII estimates that lowering government ownership to 51% in 78 listed PSEs could unlock approximately ₹10 lakh crore. In the initial two years, disinvestment in 55 PSEs could raise about ₹4.6 lakh crore, followed by an additional ₹5.4 lakh crore from 23 more enterprises.

Chandrajit Banerjee, CII Director General, stated that this phased stake reduction balances strategic control with value creation. The proceeds could be channeled into crucial areas like healthcare, education, green infrastructure, and fiscal consolidation, all while maintaining government control in strategically vital sectors.