In the age of landline phones, BSNL was synonymous with telecom connectivity in India, but is fading away in the mobile phone era. A year after ruling out privatisation of the state-owned entity, the government has plans to set up a public sector telco, which will be run professionally.
In FY22, the Modi government had set a target to raise Rs 1.75 lakh crore by selling stakes in state-owned businesses, but slashed it by almost 50 per cent to Rs 78,000 crore. That year, despite selling off a debt-laden Air India to Tata Sons, the government raised little more than Rs 13,000 crore, prompting it to lower targets further in FY23. As the state struggles to divest, Finance Minister Nirmala Sitharaman has claimed that it isn't in a rush to sell stakes.
An enhanced public sector telco?
Barely a month after the government picked up a 33 per cent stake in Vodafone Idea, Sitharaman announced plans for professionally run, state-owned telco. Speaking at the Raisina Dialogue, the minister added that while the government won't produce everything from pins to crops, it will maintain a presence in four strategic sectors. These industries include telecom, energy, financial services and insurance.
Missing targets year after year
After missing divestment targets for FY22 by a long margin, the Indian government lowered it to Rs 65,000 crore for FY23, before cutting it further to Rs 50,000 crore. While little more than Rs 31,000 crore had been raised as of February 2023, the government's target for FY24 is a modest Rs 51,000 crore.
The Finance Minister also mentioned that firms which are unsustainable will also be merged to form bigger entities that can take care of themselves with higher scalability. These plans come after the government ruled out divestment from BSNL last year, even as it lags behind in the Indian telecom sector.
Divestment in dire straits
After it gave up on privatisation of Bharat Petroleum, the Indian state is eyeing a stake sale in IDBI Bank, Shipping Corporation of India, and Container Corporation of India among others. The divestment in the Container Corporation has already hit troubled waters, with the top contender Adani Ports reconsidering its bid following the damage caused by Hindenburg report.
