Privatisation of CPSEs during recession ‘horrible idea’, says former chief statistician Pronab Sen

File image of former chief statistician Pronab Sen. PTI

New Delhi: Privatisation of central public sector enterprises (CPSEs) in a recession time is a “horrible idea” as a legitimate requirement of the financial sector to meet the current requirement is further eroded, former chief statistician Pronab Sen said on Wednesday.

Participating in an event organised by industry body PHDCCI, Sen further said Finance Minister Nirmala Sitharaman did not mention world “employment” in her Budget Speech 2021-22.

“Privatisation (of CPSEs) is best done when the economy is booming…privatisation in a recession time is a horrible idea,” he said.

The government has budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including two public sector banks (PSBs) and one general insurance company, in the next fiscal year beginning 1 April.

“The point is that timing is wrong because a legitimate requirement of the financial sector to meet the current requirement is further eroded,” Sen added.

He said that even though India’s fiscal deficit will go up from 3.5 percent to 9.5 percent in the current fiscal ending March, but in terms of the current year’s expenditure, the country is pretty much at status quo.

“The fiscal stimulus to the economy was small… As the bulk of increase of fiscal deficit is the supply-side measure, not demand side,” Sen noted.

The former chief statistician said no money has been allocated for some big-ticket projects in the Budget.

“Unlike earlier Budgets, there was no mention of world employment in the finance minister’s Budget Speech,” he said adding that the finance minister only made a passing mention of the MSME sector.

“For MSMEs (micro, small and medium enterprises), nothing has been done in this year’s Budget,” Sen said.

He, however, praised the government for cleaning its accounts in the Budget.

“The government has managed to clear all its liability which was anywhere between Rs 1.7 lakh crore and Rs 3 lakh crore in terms of outstanding payments and create credibility back for the government which was lacking earlier,” Sen said.