CII proposes blueprint for CPSE privatisation
Industry body, Confederation of Indian Industries (CII) on Sunday pitched for a calibrated approach to accelerate privatisation in Central Public Sector Enterprises (CPSE) in non-strategic sector and dis-investment as an interim measure. This is part of its proposal for Union Budget 2026-27.
Interestingly, the word disinvestment (minority stake sale, strategic sale or privatisation) is no longer part of the budget documents. Rather, the term ‘Miscellaneous Capital Receipts’ is being used Receipts under this category include proceeds on account of management of equity investments and public assets through various mechanisms. For FY26, the estimate is ₹47000 crore. Till date, over ₹8700 crore has been collected through sale of stakes in various government undertakings and over ₹18800 crore mobilised through monetisation.
As the industry body feels that privatisation is a time consuming process, it proposed a time-bound and phased disinvestment as an interim measure. Its analysis showed that reducing the government’s stake to 51 per cent in 78 listed PSEs could unlock close to ₹10 lakh crore. In the first two years of the roadmap, disinvestment strategy could target 55 PSEs where the government holds 75 per cent or less, mobilising around ₹4.6 lakh crore. In the subsequent stage, 23 PSEs with higher government stakes (over 75 per cent) could be disinvested, potentially bringing in ₹5.4 lakh crore.
The industry body suggested four-pronged strategy. First it recommends a shift to a demand-based approach in selecting PSEs for privatisation. Presently, the government identifies specific enterprises for sale and subsequently invites investor interest. However, when sufficient demand or valuation is not achieved, the process often stalls.
“CII suggests reversing this sequence by first gauging investor interest across a broader set of enterprises and then prioritising those that attract stronger interest and meet valuation expectations,” it said. Second, to provide investors greater clarity and planning time, it recommends that the Government announce a rolling three-year privatisation pipeline, outlining which enterprises are likely to be taken up for privatisation during this period.
Third, an institutional framework can strengthen oversight, accountability, and investor confidence, making privatisation predictable and professionally managed. Accordingly, it “recommends a dedicated body with a Ministerial Board for strategic guidance, an Advisory Board of industry and legal experts for independent benchmarking, and a professional management team to handle execution, due diligence, market engagement, and regulatory coordination.”
Fourth, recognising that full privatisation of all non-strategic PSEs is a complex and time-consuming, the industry body recommends a calibrated disinvestment approach combined with a three-year roadmap, as an interim measure. 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.
“A calibrated reduction of 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 ₹10 lakh crore of productive capital would provide vital resources to accelerate physical and social infrastructure development and support fiscal consolidation”, highlighted Chandrajit Banerjee, Director General of CII.
Published on January 11, 2026
