Most PSU banks will eventually be privatised: Finance Secretary

The government will eventually privatise most public sector banks, Finance Secretary T.V. Somanathan said. The government will only maintain a minimum presence in the sector, according to its stated policy, Somanathan said at the India Policy Forum 2021 on July 13. He clarified that these were his personal views.

Somanathan was speaking at the forum, which was organised by the National Council of Applied Economic Research (NCAER), an economy-based think tank, at a time when India’s largest state insurer is in the process of preparing for its IPO.

“The thrust now of the government is to go beyond this position that the public sector banks will remain in the public sector. We have announced that most of the public sector banks will eventually be privatised… Saying eventually privatised and actually privatising them are two different things, but we are actively engaged in privatising them. And banking is one of those sectors where only a bare minimum public sector banks will eventually remain, that is the stated policy,” he said.

Somanathan added that governmental subsidies needed an overhaul, with reforms needed to provide adequate economic support for essential items. Subsidy reform was one major component of fiscal improvement, other avenues being improving the efficiency of public expenditure. Somanathan highlighted education, health and infrastructure as sectors where the exchequer needs to improve its spending efficiency.

The finance secretary also pointed out that the GST filing portal, which has been plagued by glitches and bugs, has been fixed. Additional improvements were also planned in revenue collections.