Third Wave Of Big Bang Reforms? Key Modi Cabinet Meet Today, BPCL Stake Sale Tops Agenda: Sources

The Narendra Modi government is likely to make another wave of key reforms to battle against economic slowdown on Wednesday. Sources say that the Cabinet Committee on Economic Affair will hold a crucial meeting at around 6:30 pm in New Delhi. The CCEA agenda will include a nod for strategic sale of the BPCL, the Shipping Corporation and the Container Corporation of India. Apart from the stake sale, the CCEA will also discuss to bring down the government’s stake below 51 per cent in selected Public Sector Undertakings including the NTPC, the PowerGrid, PFC, BEL and the IOC. The development comes after Union Finance Minister Nirmala Sitharaman announced that the government planned to wrap up sale of ailing Air India and Bharat Petroleum Corporation Limited (BPCL) by March 2020.

Sitharaman had also said that investor interest about Air India is optimistic at the moment, contrary to a tepid response received during the bidding process a year ago. Meanwhile, Civil Aviation Minister Hardeep Singh Puri said that, "Currently, the investor outreach programme is on. Air India CMD, Aviation Secretary and other concerned officials are meeting potential bidders."

Experts say that the privatisation of the Air India and the BPCL is likely to help the Modi government to meet its divestment target of Rs 1 lakh crore in the current financial year. According to the current market capitalisation of BPCL, the buyer will have to shell out at least Rs 60,000 crore to buy the government’s 53 per cent stake and about Rs 30,000 crore for another 25 per cent from the public in a mandatory open offer.

On Monday, Sitharaman told the Lok Sabah that the government has brought in major reforms to boost investment climate in the country for becoming a $5-trillion economy.

"During the last five years, the government has implemented major reforms to build the investment climate in the country for becoming a US 5 trillion-dollar economy. Introduction of the Insolvency and Bankruptcy Code (IBC) in 2016 is a significant step towards cleaning and strengthening the financial system of the country," she said in the Lok Sabha.

The finance minister was replying to questions in the Lok Sabha whether the government has analysed reasons for economic slowdown in the country; analysis of impact of GST and if any study has been conducted on impact of the implementation of the foreign trade agreement. Sitharaman said India's gross domestic product (GDP) growth during 2014-19 averaged 7.5 per cent, which was the highest among G-20 countries. The IMF's World Economic Outlook (WEO) of October projects a significant slowdown in world output and trade in 2019. Yet, India, despite some recent deceleration of GDP growth, is still projected by WEO to grow at the fastest rate in 2019-20 among G-20 countries, she said.