CII has suggested an accelerated four-pronged strategy to unlock value from the disinvestment of public sector enterprises, calling for a demand-driven approach in selecting units for privatisation and following a predictable roadmap.
In its proposals for Budget 2026-27, the industry body said the Modi government can unlock ₹10 lakh crore (trillion) by cutting stake in the 78 listed PSUs to 51 per cent.
It 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, to sustain capital expenditure and address developmental priorities amid global economic uncertainties.
CII suggested the Centre may announce a rolling three-year privatisation pipeline, outlining which enterprises are likely to be taken up for privatisation during this period, recognising that full privatisation of all non-strategic PSEs is a complex and time-consuming process.
It argued that this visibility would encourage deeper investor engagement and more realistic valuation and price discovery, which would contribute towards expediting the privatisation 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 its analysis, reducing the government’s stake to 51 per cent in 78 listed PSEs could unlock close to ₹10 lakh crore.
In the first two years of the roadmap, the disinvestment strategy could target 55 PSEs where the government holds 75 per cent or less, mobilising around ₹4.6 lakh crore. In the subsequent stage, 23 PSEs with higher government stakes (over 75 per cent) could be disinvested, potentially bringing in ₹5.4 lakh crore, it said.
“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 ₹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.
