Budget 2026: CII pitches demand-led, faster privatisation of PSEs; seeks three-year pipeline

Industry body Confederation of Indian Industry (CII) has called for a faster, demand-driven privatisation strategy for public sector enterprises (PSEs) in the Union Budget 2026-27, urging the government to adopt a predictable roadmap to unlock value from disinvestment and mobilise resources for capital expenditure amid global economic uncertainties.In its Budget proposals, CII suggested an accelerated four-pronged approach to privatisation, focusing on sectors where private participation can improve efficiency, technology adoption and global competitiveness, while allowing the government to sustain capex and meet developmental priorities.The industry lobby recommended that the Centre announce a rolling three-year privatisation pipeline, clearly outlining which enterprises are likely to be taken up during the period. It noted that full privatisation of all non-strategic PSEs is complex and time-consuming, and greater visibility would help attract deeper investor participation and improve valuation and price discovery.“Government could reduce its stake in listed PSEs in a phased manner to 51 per cent initially, allowing it to remain the single largest shareholder while releasing significant value into the market. Over time, this stake could be brought down further to between 33 and 26 per cent,” CII said.According to its analysis, reducing the government’s stake to 51 per cent in 78 listed PSEs could unlock close to Rs 10 lakh crore. In the first two years of the roadmap, disinvestment could target 55 PSEs where government holding is 75 per cent or less, mobilising around Rs 4.6 lakh crore. In the subsequent stage, 23 PSEs with higher government stakes could be disinvested, potentially raising Rs 5.4 lakh crore.“A calibrated reduction of the government’s stake in listed PSEs to 51 per cent and even lower is a pragmatic step that balances strategic control with value creation. Unlocking nearly Rs 10 lakh crore of productive capital would provide vital resources to accelerate physical and social infrastructure development and support fiscal consolidation,” said CII Director General Chandrajit Banerjee.CII said strategic privatisation, supported by strong governance, regulation and enabling infrastructure, can free up public resources for health, education and green infrastructure, while competitive markets drive efficiency.“India’s growth story is increasingly being powered by private enterprise and innovation. A forward-looking privatisation policy, aligned with the vision of Viksit Bharat, will enable the government to focus on its core functions while empowering the private sector to accelerate industrial transformation and job creation,” it said.The industry body also urged faster implementation of the government’s strategic disinvestment policy, which envisages an exit from all PSEs in non-strategic sectors and minimal presence in strategic ones.Recommending a shift to a demand-based approach, CII said the current practice of identifying enterprises first and then inviting bids often leads to stalled processes if valuation expectations are not met. Instead, it suggested gauging investor interest across a wider pool of enterprises first, and prioritising those with stronger demand.Such an approach, it said, would ensure smoother execution and better price discovery, while structured feedback from investors could help address procedural and regulatory bottlenecks.CII also proposed setting up a dedicated institutional framework to make privatisation more predictable and professionally managed, comprising a ministerial board for strategic guidance, an advisory board of industry and legal experts, and a professional management team to handle execution, due diligence, market engagement and regulatory coordination.