Disinvestment is not like selling family silver: FM

Finance Nirmala Sitharaman on Sunday said the government’s disinvestment policy is not akin to selling the family silver and said the government will work with the Reserve Bank of India on the proposal to privatise banks.

Rejecting the Opposition’s charge, the Finance Minister said the disinvestment policy has been devised to ensure better spending of taxpayers’ money and scaling up public sector enterprises in strategic area to their full potential.

“Family silver should be strengthened. It shouldn’t be that because you spread it so thinly. Our objective through this policy is to prime the assets in PSUs... to scale them up so that they reach the maximum potential to meet the aspirations of growing India,” Sitharaman said addressing a meeting with industry leaders.

“I also believe that the government’s commitment is to ensure qualitative spending of taxpayers money for returns,” she said at Yogi Sabhagruh in Dadar.

She also said the government wants few public sector enterprises in specified sectors to do well to ensure that taxpayer money is spent wisely.

Later addressing the media, she stated that disinvestment is a very responsible, transparent and open process and not just a random list.

In the Union Budget 2021-22 February 1, the Finance Minister had announced that the government has approved a policy of strategic disinvestment of public sector enterprises. “The policy provides a clear roadmap for disinvestment in all non-strategic and strategic sectors,” she had said.

Banking

She also said the government has no plan to form any bank investment company that would house the government stakes in banks. The details are being worked out, she said.

The Budget has proposed to privatise two Public Sector Banks apart from IDBI Bank.

On the proposal of the asset reconstruction company, the Finance Minister said it is not a bad bank but a formulation to address the problem of banks’ non performing assets.

The government may have to give some guarantee for the National Asset Reconstruction Company, she said, adding that the solution is driven by banks and not by the government.

The Minister also said that the banks are gradually getting out of the risk aversion, set in during the early days of the pandemic.

The proposal for the Development Finance Institute is also based on past experience with IDBI, she said.

“Private DFI should also be there. Only the government can’t meet the aspirations and development requirements. Private sector also has a role and that is also being facilitated legally. The government DFI will also work in competition and work better,” she said.

No discussion on Covid cess

Meanwhile, the Finance Minister also stressed that the idea of putting an additional burden on the people through a Covid related cess or tax had never featured in government discussions for the Budget.

“The Prime Minister was clear that there should be not a burden of even one extra rupee on the public,” she said while noting that the Budget was finalised in the backdrop of revenue limitations.

The Minister also stressed that the government has full trust and faith in both business and taxpayers. It is now using big data and analytics to weed out those who are misusing and playing the system.

“Revenue from goods and services tax has been increasing the last three months as the economy is reviving. There is also a big role of technology, which is plugging leakages,” she said, stressing that honest taxpayers do not need to worry.

The government has taken steps for faceless assessment and appeal and has now proposed to reduce this time-limit for re-opening of assessment to three years from the present six years.

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