A change of course on privatisation

The modest targets reflect a welcome embrace of pragmatism in the govt's economic policy

India’s Budget for FY22-23 has signalled that the government will proceed cautiously on privatisation. Would-be reformers will denounce the change of course as a huge setback to reforms. It is, in fact, a move that acknowledges the realities of India’s political economy.

The Budget sets a modest target for privatisation of Rs 65,000 crore. This is way below the target of Rs 1.75 trillion for FY21-22. Receipts for FY 21-22 are expected to be Rs 78,000 crore, much of which will be accounted for by disinvestment in LIC. It will not come from privatisation or the transfer of ownership and control, which the