In 2021, Modi’s government announced a major programme to privatise most of India’s state-run companies. The plan was so drastic that even in the four sectors that India sees as sensitive, such as telecoms and banking, it wanted to keep only a minimum presence, while exiting from all other sectors
New Delhi: Prime Minister Narendra Modi is pouring billions into ailing state-run firms after slowing ambitious divestment plans that were intended to reduce the role of the state in business, according to government sources and a document reviewed by Reuters.
Less than a month into 2025, New Delhi has plans to invest about $1.5 billion in financial rescue packages for two state-owned firms after failing to sell them to private companies.
It has also decided to put in “abeyance” privatisation of at least nine state-owned units after opposition from relevant ministries, according to a document that detailed recommendations of a government panel set up to identify privatisation candidates.
The document, reviewed by Reuters, did not cite reasons for the decision.
The nine companies include Madras Fertilizers, Fertilizer Corp of India, MMTC and NBCC (India), the document showed.
Housing and Urban Development Corp, that was also identified for privatisation, has now been ‘exempted’ implying it will not be sold, according to the document.
Among the state-owned companies being revived with government funding is helicopter operator Pawan Hans.
The government is planning to infuse around $230 million-$350 million in Pawan Hans to modernise its aging fleet of helicopters after four failed attempts to sell the company, two government sources said.
The amount of infusion is still being finalised as the options being considered for fleet modernisation include both outright acquisition and leasing, one of the sources said.
The sources declined to be identified because of the sensitivity of the issue.
India’s finance and civil aviation ministries did not immediately reply to e-mails seeking comment on the privatisation plans or on the Pawan Hans investment.
The fund infusion in Pawan Hans and plans to halt the privatisation of nine firms have not been previously reported.
In 2021, Modi’s government announced a major programme to privatise most of India’s state-run companies. The plan was so drastic that even in the four sectors that India sees as sensitive, such as telecoms and banking, it wanted to keep only a minimum presence, while exiting from all other sectors.
Reuters