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Budget 2026 Expectations: CII Suggests Phased Privatisation Roadmap For Public Sector Enterprises
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CII calls on the Centre to announce a rolling three-year privatisation pipeline, clearly outlining the enterprises likely to be taken up for privatisation over that period.
Budget 2026 will be tabled on Sunday, February 01.
Industry lobby CII has proposed an accelerated, four-pronged strategy to unlock value from the disinvestment of public sector enterprises (PSEs), pitching for a demand-driven approach to privatisation and a predictable, medium-term roadmap. The Budget 2026 will be tabled on Sunday, February 1.
In its recommendations for the Union Budget 2026-27, the Confederation of Indian Industry (CII) urged the government to adopt a calibrated privatisation strategy to mobilise resources, especially in sectors where private participation can improve efficiency, bring in technology and enhance global competitiveness. Such an approach, it said, would help sustain capital expenditure and support developmental priorities at a time of heightened global economic uncertainty.
CII called on the Centre to announce a rolling three-year privatisation pipeline, clearly outlining the enterprises likely to be taken up for privatisation over that period. Acknowledging that full privatisation of all non-strategic PSEs is complex and time-consuming, it argued that greater visibility would encourage deeper investor engagement, improve valuation realism and facilitate better price discovery, thereby speeding up the process.
“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 stated.
According to the industry body’s analysis, reducing the government’s stake to 51 per cent in 78 listed PSEs could unlock nearly Rs 10 lakh crore of value. In the first two years of the proposed roadmap, the disinvestment programme could focus on 55 PSEs where government holding is 75 per cent or lower, potentially mobilising about Rs 4.6 lakh crore. In the next phase, 23 PSEs with government ownership exceeding 75 per cent could be taken up for disinvestment, generating an estimated 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, combined with a focus on governance reforms, effective regulation and enabling infrastructure, would allow competitive markets to drive efficiency while freeing up public resources for high-impact areas such as health, education and green infrastructure.
“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 lobby also called for faster implementation of the government’s strategic disinvestment policy, which envisages an exit from all PSEs in non-strategic sectors and a minimal presence in strategic ones.
Recommending a shift to a demand-based approach, CII pointed out that the current model involves the government identifying enterprises for sale and then seeking investor interest—often leading to stalled transactions if valuations or demand fall short. It suggested reversing this sequence by first gauging investor appetite across a wider universe of PSEs and then prioritising those with stronger interest and valuation support.
Such a model, CII said, would enable smoother execution and better price discovery, while structured feedback from investors could help address regulatory and procedural bottlenecks.
To strengthen credibility and execution, the industry body also proposed an institutional framework for privatisation, including a dedicated body with a ministerial board for strategic oversight, an advisory board of industry and legal experts for independent benchmarking, and a professional management team to handle execution, due diligence, investor outreach and regulatory coordination. It added that such a structure should also track market developments, stakeholder feedback and post-privatisation outcomes to enable continuous improvement.
January 11, 2026, 15:08 IST
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