Budget 2026: CII pitches demand-led disinvestment plan; proposes four-step privatisation roadmap – The Times of India

The Confederation of Indian Industry (CII) suggested a four-fold privatisation process in their recommendations on the Union Budget 2026-27. They called for faster and more predictable disinvestment. The industry body claimed that a calibrated privatisation approach would help sustain capital expenditure and fund development priorities, particularly in sectors where private participation can improve efficiency, technology adoption, and competitiveness. CII Director General Chandrajit Banerjee highlighted the role of private enterprise in India’s growth. “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,” he said, as quoted by ANI. To accelerate the government’s exit from non-strategic Public Sector Enterprises (PSEs), CII outlined a four-pronged strategy. First, CII recommended adopting a demand-led approach for selecting PSEs for privatisation. Contrary to short-listing entities and then checking the appetite for them, it was proposed that government needs to start by measuring market interest for a larger list of entities and short-list those with better interest and valuation. Second, the industry body called for announcing a rolling three-year privatisation pipeline in advance. According to CII, greater visibility would give investors time to plan, deepen participation, and improve price discovery. Third, CII proposed setting up a dedicated institutional mechanism to oversee privatisation. This would include a ministerial board for strategic direction, an advisory panel of industry and legal experts, and a professional execution team to handle due diligence, market engagement, and regulatory coordination. Fourth, acknowledging that complete privatisation is complex and time-consuming, CII suggested a calibrated disinvestment route as an interim measure. The government could initially reduce its stake in listed PSEs to 51 per cent, retaining management control, and later bring it down further to between 33 per cent and 26 per cent. CII estimated that lowering government ownership to 51 per cent in 78 listed PSEs could unlock nearly Rs 10 lakh crore. In the first two years, disinvestment in 55 PSEs could raise about Rs 4.6 lakh crore, followed by Rs 5.4 lakh crore from 23 additional enterprises. “A calibrated reduction of government stake balances strategic control with value creation,” Banerjee said, adding that the proceeds could fund healthcare, education, green infrastructure, and fiscal consolidation while maintaining control in strategic sectors. The Union Budget for 2026–27 will be presented on February 1.