The Government of India has stanched to privatise State-owned Enterprises and push banking sector reforms, Finance Minister Nirmala Sitharaman says. The Initial Public Offering (IPO) of Life Insurance Corporation of India has presented that the Government has committed to the process of disinvestment, Nirmala Sitharaman clarifies on September 5 at Ashwamedh – Elara India Dialogue 2022. The Government will step ahead with the new banking sector reforms as well, she added.

The Centre had planned the privatisation of two public sector banks with one general insurance company in the 2021-22 Budget. It has also revealed a public sector enterprise policy which aims at plummeting the presence of the Government in running businesses. The Government is working on a path that boosts economic growth within the next 25 years including the Central Bank, said Sitharaman. India’s economic recovery is running firm and on a good foundation, she emphasised.

The FM also spoke about Insurance Behemoth, Life Insurance Corporation of India’s (LIC) recent listing in the stock market. It States, “Strategic disinvestment has taken place in LIC, so we shall go ahead with the banking sector reform too. Even on that, the cabinet has specified a clearance, we have mentioned it in the budget. We shall proceed it forward.” Notably, LIC being the promoter and the Centre as co-promoter together holds more than 94% equity of IDBI Bank i.e. 49.24% and 45.48%, respectively. The LIC Board passed a resolution for the reduction of stake in IDBI Bank through divestment, while the government foresees strategic stake sale with the intent to abandon management control.

Sitharaman, while presenting the Union Budget FY 2021-22 in Parliament on February 1, 2022, had announced that the government has approved a strategic disinvestment policy for public sector enterprises that would provide a clear roadmap for disinvestment in all non-strategic and strategic sectors. For example, banking is among the strategic sectors.

“Several transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat among others are planned to be completed in FY 2021-22”, the Finance Minister informed the house. Sitharaman had also added that other than IDBI Bank, a proposed combination of privatisation of two Public Sector Banks and one General Insurance company will be taken up in the year 2021-22.