Budget 2026–27: CII Seeks Faster Privatisation to Unlock Rs. 10 Lakh Crores

As Finance Minister Nirmala Sitharaman gets ready to present the Union Budget 2026–27 on February 1, the Confederation of Indian Industry (CII), the industry body, has urged the government to speed up the privatisation of public sector enterprises (PSEs) through a more market-driven and predictable approach.

In its budget recommendations, CII said a faster and well-planned privatisation strategy could help the government raise funds for capital expenditures at a time when global economic conditions remain uncertain. The industry chamber demands a clear roadmap for disinvestment that unlocks value from state-owned firms while supporting infrastructure spending and fiscal stability.

Four-part strategy for faster privatisation
CII wants the central government to focus on sectors where private ownership can bring better efficiency, modern technology, and stronger global competitiveness; for that, the organisation has put forth a four-part privatisation framework. According to them, this strategy could help the government to concentrate on development priorities as private players take charge of commercial operations.

According to CII, this process needs to be faster, more transparent and better aligned with investor demand to avoid delays and poor valuations.

Call for a three-year pipeline
One of the key recommendations was the announcement of a rolling three-year privatisation pipeline. This initiative would clearly explain which public enterprises are likely to be taken up for stake sale over the period, instead of making decisions year by year.

CII said full privatisation of all non-strategic public enterprises is complicated and takes time. However, giving investors advance visibility would help generate stronger interest, improve price discovery and attract long-term capital.

Reducing stake while retaining control
The industry body has suggested that the government could initially reduce its holding in listed PSEs to 51 per cent in a phased manner. This would allow the state to remain the single largest shareholder while releasing substantial value into the market. Over time, the stake could be further lowered to between 33 per cent and 26 per cent.

According to CII's estimates, cutting the government's stake to 51 per cent in 78 listed PSEs could unlock nearly Rs. 10 lakh crores. During the first two years of such a roadmap, disinvestment could focus on 55 enterprises where the government already holds 75 per cent or less, raising about Rs. 4.6 lakh crore. In the next phase, stake sales in 23 PSEs with higher government ownership could generate an additional Rs. 5.4 lakh crore.

"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 Rs. 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.

Freeing funds for public priorities
CII said strategic privatisation, when backed by strong regulation, governance, and support infrastructure, can free up government resources for essential sectors such as healthcare, education, and green infrastructure. Competitive markets, it added, typically lead to better efficiency and innovation.

"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," the industry body said.

Push for faster strategic disinvestment.
The chamber also called for quicker implementation of the government's strategic disinvestment policy. This policy aims for a complete exit from public enterprises in non-strategic sectors and only a minimal presence in areas considered strategic for national interest.

Shift to a demand-driven approach
CII flagged problems with the current method of privatisation, where the government first identifies an enterprise for sale and then invites bids. This often results in stalled transactions when expected valuations are not achieved.

Instead, the industry body recommended a demand-based approach. Under this model, the government would first assess investor interest across a broad set of enterprises and then prioritise stake sales for those where demand is strongest. CII said this approach would lead to smoother execution, better pricing and fewer failed attempts.

The organisation also urges the government to accept structured feedback from potential investors prior to implementing privatisation strategies, as this may help authorities identify and resolve regulatory or procedural hurdles early in the process.

Dedicated framework for execution
The government should also consider establishing an institutional structure, which includes a ministerial board to provide strategic direction, an advisory board comprising industry and legal experts, and a professional management team to oversee the execution of privatisation.

Such a team would be responsible for due diligence, investor outreach, market coordination and regulatory clearances, helping ensure that privatisation moves faster and delivers better outcomes.
The recommendations were made by the Confederation of Indian Industry as part of its proposals ahead of the Union Budget 2026-27.