Nirmala Sitharaman unveiled the fifth tranche of government's Rs 20 crore fiscal package.
The government will privatise state-run enterprises in non-strategic sectors and allow private companies to invest in all areas, Finance Minister Nirmala Sitharaman announced on Sunday as part of the centre's COVID-19 economic stimulus programme.
A new "coherent" public sector enterprises policy will be formulated that will define strategic sectors which will have not more than four Public Sector Undertakings or PSUs, she said.
"A new Aatma Nirbhar Bharat (self-reliant India) will stand on a new Public Sector Enterprise Policy. In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed," the Finance Minister said.
The list of strategic sectors requiring presence of public sector undertakings in public interest will be announced later, Ms Sitharaman said.
"To minimise wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatised or merged or brought under holding companies," she said.
Finance Ministry officials say the privatisation drive will be similar to the model followed by Margaret Thatcher's UK government in the 1980s. This will involve steps like privatising Air India which is already underway.
"This is not to be seen as a COVID-19 measure but an overall change. Public sector will need a more closer look," an official said.
Nirmala Sitharaman has been announcing details of the government's Rs 20 lakh crore economic package to deal with the fallout from the coronavirus pandemic over the last five days.
A majority of the measures announced have been all about liquidity measures or regulation reforms with negligible extra budget spending.
The government has announced a variety of steps for small businesses, street vendors, farmers and poor migrants, but they have largely been either credit guarantee schemes or new fund creations to be shouldered by banks and financial institutions.
On Saturday, the government said it will ease restrictions on Foreign Direct Investment in defence manufacturing, privatisation of six more airports, opening up of more air space and allowing private sector in commercial mining of coal and minerals.
In a slew of "structural reforms", the government also allowed private players in future projects for planetary exploration, outer space travel and satellite launches.