Budget 2026: CII urges govt to 'fast track' PSU privatisation to unlock value, mobilise resources
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Industry body Confederation of Indian Industry (CII) has called for unlocking value from the country’s public sector enterprises through fast tracking privatisation. The industry body has suggested investor led three year pipeline for the same focusing on sectors where private sector can enhance efficiency and bring about global competitiveness.
“To sustain capital expenditure and address developmental priorities amid global economic uncertainties, the CII in its proposals for the union budget 2026–27, has urged the government to mobilise resources through a calibrated approach to privatisation, focusing on sectors where private participation can enhance efficiency, technology infusion, and global competitiveness,” CII said.
“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,” said Chandrajit Banerjee, Director General, CII.
January 2026
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“CII has called for accelerating the implementation of the government’s strategic disinvestment policy, which envisions an exit from all public sector enterprises (PSEs) in non-strategic sectors and a minimal presence in strategic ones. The strong policy intent sets the direction for this national endeavour,” CII said.
CII suggests four-pronged plan for PSU privatisation
CII has outlined a four-pronged comprehensive strategy to provide a fillip to the government’s privatisation plan, with a demand based approach from investors being the top pillar of the strategy.
“First, CII recommends a shift to a demand-based approach in selecting PSEs for privatisation. Presently, the government identifies specific enterprises for sale and subsequently invites investor interest. However, when sufficient demand or valuation is not achieved, the process often stalls. CII suggests reversing this sequence by first gauging investor interest across a broader set of enterprises and then prioritising those that attract stronger interest and meet valuation expectations,” the industry body said.
CII recommends three-year privatisation pipeline
“Second, to provide investors greater clarity and planning time, CII recommends that the government announce a rolling three-year privatisation pipeline, outlining which enterprises are likely to be taken up for privatisation during this period,” CII said.
“This visibility would encourage deeper investor engagement and more realistic valuation and price discovery, which would contribute towards expediting the privatisation process,” it added.
CII calls for institutional framework for PSU privatisation
“Third, an institutional framework can strengthen oversight, accountability, and investor confidence, making privatisation predictable and professionally managed,” it said.
“CII recommends a dedicated body with a ministerial board for strategic guidance, an advisory board of industry and legal experts for independent benchmarking, and a professional management team to handle execution, due diligence, market engagement, and regulatory coordination,” CII added.
“This structure would also monitor market developments, stakeholder feedback, and post-privatisation performance to enable continuous improvement,” it added.
Govt should pare stake in PSEs to 51%: CII
“Fourth, recognising that full privatisation of all non-strategic PSEs is a complex and time-consuming, CII recommends a calibrated disinvestment approach combined with a three-year roadmap, as an interim measure,” it said.
“Government could reduce its stake in listed PSEs in a phased manner to 51% 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%,” it added.
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Govt stake sale to mobilise ₹10 lakh cr: CII
CII said its analysis shows that reducing the government’s stake to 51% in 78 listed PSEs could unlock close to ₹10 lakh crore.
“In the first two years of the roadmap, disinvestment strategy could target 55 PSEs where the Government holds 75% or less, mobilising around ₹4.6 lakh crore. In the subsequent stage, 23 PSEs with higher Government stakes (over 75%) could be disinvested, potentially bringing in ₹5.4 lakh crore,” it added.
The industry body said these measures can enhance investor confidence, ensure predictable and transparent processes, and maximise value realisation for the government.