Industry body Confederation of Indian Industry (CII) has urged the Centre to adopt an expedited, demand-led approach to privatisation of public sector enterprises (PSEs), recommending a predictable roadmap to unlock value and mobilise resources in the Union Budget 2026-27.
In its budget proposals, CII suggested a calibrated four-pronged strategy focused on sectors where private participation can improve efficiency, technology adoption and global competitiveness. Such an approach, it said, would help sustain capital expenditure and address developmental priorities amid global economic uncertainty.
The industry lobby called for the announcement of a rolling three-year privatisation pipeline, outlining enterprises likely to be taken up during the period. Acknowledging that full privatisation of all non-strategic PSEs is complex and time-consuming, CII argued that greater visibility would encourage deeper investor engagement and improve valuation and price discovery.
“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.
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According to its assessment, lowering the government’s stake to 51 per cent in 78 listed PSEs could unlock nearly Rs 10 lakh crore. In the first two years of the proposed roadmap, disinvestment could target 55 PSEs where government holding is 75 per cent or less, mobilising around Rs 4.6 lakh crore. A subsequent phase involving 23 PSEs with higher government stakes could potentially yield 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,” CII Director General Chandrajit Banerjee said.
CII also recommended accelerating the government’s strategic disinvestment policy, which envisages an exit from non-strategic sectors and a minimal presence in strategic ones. It called for a shift to a demand-based approach in identifying PSEs for privatisation, arguing that current processes often stall when investor interest or valuation expectations are not met.
Reversing the sequence by first gauging investor demand, CII said, would lead to smoother execution and better price discovery, while structured feedback could help remove procedural or regulatory bottlenecks.
To strengthen oversight and investor confidence, the industry body proposed a dedicated institutional framework comprising a ministerial board for strategic direction, an advisory board of industry and legal experts, and a professional management team to handle execution and market engagement.
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