Will coalition politics derail the government's disinvestment plans?

livemint.com:

NEW DELHI : Privatization may take the backseat in the coming coalition government as a reduced majority forces the pro-reform Bharatiya Janata Party (BJP) to work alongside allies with different priorities, officials and experts said. Strategic sales already in advanced stages like IDBI Bank, Shipping Corp. of India and BEML may take off in the second half of FY25, but other transactions and fresh disinvestments may not be as lucky, they said.

In the past too, resistance from states was a key reason for the slow progress of divestments. “Some of the state government entities (that are not aligned with the BJP, and now with NDA) have submitted bids for some of the strategic sales of PSUs knowing well that the rules do not permit it. In some cases, they’ve gone to courts to prevent or stall the sale, which leads to further erosion of whatever value the asset may hold at that time," an official said.

For instance, the Kerala State Industries Development Corp. had submitted a bid to take over HLL Lifecare Ltd located in the state, which the Centre rejected in 2022. Earlier in 2020, the Chhattisgarh assembly adopted a resolution to buy NMDC’s Nagarnar Steel plant if it was divested.

According to a second official, since the PSUs are located in states, the Centre needs states' cooperation to provide approvals, and maintain and hand over the assets. Besides IDBI Bank, where the government and LIC are jointly selling nearly 61% stake, divestment of NMDC’s steel plant in Nagarnar in Chhattisgarh; SAIL’s Salem steel plant; Indian Medicines Pharmaceuticals Corp. Ltd; Ferro Scrap Nigam Ltd; HLL Lifecare Ltd and Project & Development India Ltd are in various stages.