Investors globally eagerly anticipate India's upcoming budget, with expectations centered on reforms that could enhance the investment climate. So, how can the world's fastest-growing major economy become a more attractive investment destination? Take a look to find out...

India budget 2024-25: Will government cancel privatisation plans?

In an effort to revive the country's faltering economy, Pakistan's Prime Minister Shehbaz Sharif announced&nbsp;plans on Tuesday (May 14)&nbsp;to privatise all state-owned enterprises (SOEs), with the exception of strategic ones. This&nbsp;initiative is intended to ease the financial strain on the nation, which is facing major&nbsp;economic troubes.

During a review meeting led by Prime Minister Shehbaz Sharif, it was announced that the government plans to privatise all state-owned enterprises, expanding beyond the initial proposal to privatise only loss-making firms, as reported by the media. This decision coincides with Pakistan's negotiations with the International Monetary Fund (IMF) for a new long-term Extended Fund Facility (EFF).

In his address, Sharif said&nbsp;that the government's primary role should be to foster a favourable environment for business and investment rather than participating directly in commercial activities. He instructed all ministries to work with the Privatisation Commission to support the process.

Among the key enterprises set for privatisation is Pakistan International Airlines (PIA), a chronically loss-making entity that&nbsp;burdens the national budget. Sharif mandated that the privatisation of PIA be broadcast&nbsp;live to ensure transparency during the bidding and sale process.

PIA, which needs 11.5 billion Pakistani rupees monthly just for debt servicing, is one of the top public sector entities incurring substantial losses. The privatisation processes of other institutions will also be televised to maintain transparency.

<a href="https://www.wionews.com/world/pok-protests-intensify-despite-sharifs-aid-assurance-721288">Also read |&nbsp;PoK protests intensify despite Sharif's aid assurance</a>

<h2>Government unveils privatisation programme 2024-2029</h2>

A roadmap for the Privatisation Programme 2024-2029 was presented during the meeting, highlighting the prioritisation of loss-making state-owned enterprises (SOEs) for privatisation, according to The Express Tribune. To expedite the process, the government plans to appoint a pre-qualified panel of experts within the Privatisation Commission.

The move towards privatisation has been strongly advocated by the Sharif-led government as essential for alleviating the country's financial strain, The Dawn newspaper reported. Pakistan’s Finance Minister Muhammad Aurangzeb said, "You have to move towards privatisation if you want economic stability in the country."

The government's decision to limit its involvement to strategic and essential SOEs aligns with recommendations from international institutions like the IMF, which has long urged Pakistan to pursue privatisation to address its fiscal challenges.

Despite making progress in stabilising its economy, Pakistan continues to face significant challenges, including a high fiscal shortfall and stagnant growth.&nbsp;

Also watch |&nbsp;Protesters call of march in PoK after Pakistan govt accepts charter of demands

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/protesters-call-of-march-in-pok-after-pakistan-govt-accepts-charter-of-demands-721310/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

Last summer, Pakistan narrowly avoided default, teetering on the brink of a financial crisis.&nbsp;

(With inputs from agencies)

In an effort to revive the country's faltering economy, Pakistan's Prime Minister Shehbaz Sharif announced plans on Tuesday (May 14) to privatise all state-owned enterprises (SOEs), with the exception of strategic ones.

In an effort to revive the country's faltering economy, Pakistan's Prime Minister Shehbaz Sharif announced plans on Tuesday (May 14) to privatise all state-owned enterprises (SOEs), with the exception of strategic ones. This initiative is intended to ease the financial strain on the nation, which is facing major economic troubes. During a review meeting led by Prime Minister Shehbaz Sharif, it was announced that the government plans to privatise all state-owned enterprises, expanding beyond the initial proposal to privatise only loss-making firms, as reported by the media. This decision coincides with Pakistan's negotiations with the International Monetary Fund (IMF) for a new long-term Extended Fund Facility (EFF). In his address, Sharif said that the government's primary role should be to foster a favourable environment for business and investment rather than participating directly in commercial activities. He instructed all ministries to work with the Privatisation Commission to support the process. Among the key enterprises set for privatisation is Pakistan International Airlines (PIA), a chronically loss-making entity that burdens the national budget. Sharif mandated that the privatisation of PIA be broadcast live to ensure transparency during the bidding and sale process. PIA, which needs 11.5 billion Pakistani rupees monthly just for debt servicing, is one of the top public sector entities incurring substantial losses. The privatisation processes of other institutions will also be televised to maintain transparency. Also read | PoK protests intensify despite Sharif's aid assurance Government unveils privatisation programme 2024-2029 A roadmap for the Privatisation Programme 2024-2029 was presented during the meeting, highlighting the prioritisation of loss-making state-owned enterprises (SOEs) for privatisation, according to The Express Tribune. To expedite the process, the government plans to appoint a pre-qualified panel of experts within the Privatisation Commission. The move towards privatisation has been strongly advocated by the Sharif-led government as essential for alleviating the country's financial strain, The Dawn newspaper reported. Pakistan’s Finance Minister Muhammad Aurangzeb said, "You have to move towards privatisation if you want economic stability in the country." The government's decision to limit its involvement to strategic and essential SOEs aligns with recommendations from international institutions like the IMF, which has long urged Pakistan to pursue privatisation to address its fiscal challenges. Despite making progress in stabilising its economy, Pakistan continues to face significant challenges, including a high fiscal shortfall and stagnant growth. Also watch | Protesters call of march in PoK after Pakistan govt accepts charter of demands Last summer, Pakistan narrowly avoided default, teetering on the brink of a financial crisis. (With inputs from agencies)

Pakistan announces sweeping privatisation plan amid IMF loan negotiations

Pakistan is undertaking a significant economic shift by privatising most state-owned enterprises. This move aims to address the financial strain caused by loss-making s-o-e-s and bolster the country's economy.

25 entities listed for privatisation in Pakistan

The UAE is making efforts to make private jobs and business easier for its citizens.&nbsp;

The government has urged private firms to hire local talents to reach at least 10 per cent by the end of 2026. Companies that fail to recruit at least two per cent of nationals by next month will face a fine, AFP reported.&nbsp;

Not just this, the UAE has also announced that it will implement a year-long paid leave for citizens working in the public sector to start their own businesses. The measure is expected to begin from January 2, 2023. The individuals will be paid half of their salaries for a year.&nbsp;

<a href="https://www.wionews.com/middle-east/uae-winter-weather-forecast-dubai-gets-heavy-rain-cloudy-skies-as-temperatures-begin-to-fall-546719">Also read |&nbsp;UAE Winter Weather Forecast: Dubai gets heavy rain, cloudy skies as temperatures begin to fall</a>

The announcement was made by the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, vice president and prime minister of the country to encourage more businesses.&nbsp;

In a tweet, Sheikh Mohammed tweeted, "Today, within the Council, we decided on sabbatical leave for citizens working in the government who wish to run their own businesses. The leave lasts for a full year, with half the salary, while preserving the job. Our goal is to encourage our youth to take advantage of the huge business opportunities offered by our national economy."

Home to over nine million people, the International Labour Organisation claimed that only 12 per cent of nationals are recruited in the private sector with over 85 per cent taken by foreign nationals.&nbsp;

UAE like any other country always advocated for the public sector as an employment vehicle for its citizens. But time is changing now.&nbsp;

The government also announced income support of AED 7,000 ($1,900) for citizens who joined the private sector and have an income of less than AED 30,000.&nbsp;

<a href="https://www.wionews.com/middle-east/uae-new-visa-rules-you-wont-be-able-to-fly-if-this-detail-is-missing-in-your-passport-536500">Also read |&nbsp;UAE new visa rules: You won’t be able to fly if THIS detail is missing in your passport</a>

However, no minimum wage has been decided for Emiratis. But in Sharjah, a minimum salary of AED 25,000 has been entitled.&nbsp;

Despite having one of the lowest employment rates in Middle East Asia, data showed that Emiratis are not publicly available. The rate climbed to 4.2 per cent in 2019 from 2.5 in 2012.&nbsp;

Many experts believe that with this measure government is trying to make citizens alter their expectations, and work for long hours with less salary.&nbsp;

An Emirati researcher at Oxford said that discontent in the country has been increasing especially after the govt scrapped the laws capping foreign ownership at 49 per cent.&nbsp;

The debate sparked further&nbsp;after an advertisement for a "sandwich maker" at a Subway store was criticised prompting govt probe later.&nbsp;A user on Twitter said, "The lack of administrative, financial and technical jobs has led to 'sandwich maker'... Oh, what an age!" 
&nbsp;

(With inputs from agencies)

WATCH WION LIVE HERE

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="350" loading="”lazy”" src="https://www.wionews.com/live-tv/embed?autoplay=1&amp;mute=1" width="100%"></iframe>

The UAE is making efforts to make private jobs and business easier for its citizens. The government has urged private firms to hire local talents to reach at least 10 per cent by the end of 2026.

The UAE is making efforts to make private jobs and business easier for its citizens. The government has urged private firms to hire local talents to reach at least 10 per cent by the end of 2026. Companies that fail to recruit at least two per cent of nationals by next month will face a fine, AFP reported. Not just this, the UAE has also announced that it will implement a year-long paid leave for citizens working in the public sector to start their own businesses. The measure is expected to begin from January 2, 2023. The individuals will be paid half of their salaries for a year. Also read | UAE Winter Weather Forecast: Dubai gets heavy rain, cloudy skies as temperatures begin to fall The announcement was made by the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, vice president and prime minister of the country to encourage more businesses. In a tweet, Sheikh Mohammed tweeted, "Today, within the Council, we decided on sabbatical leave for citizens working in the government who wish to run their own businesses. The leave lasts for a full year, with half the salary, while preserving the job. Our goal is to encourage our youth to take advantage of the huge business opportunities offered by our national economy." Home to over nine million people, the International Labour Organisation claimed that only 12 per cent of nationals are recruited in the private sector with over 85 per cent taken by foreign nationals. UAE like any other country always advocated for the public sector as an employment vehicle for its citizens. But time is changing now. The government also announced income support of AED 7,000 ($1,900) for citizens who joined the private sector and have an income of less than AED 30,000. Also read | UAE new visa rules: You won’t be able to fly if THIS detail is missing in your passport However, no minimum wage has been decided for Emiratis. But in Sharjah, a minimum salary of AED 25,000 has been entitled. Despite having one of the lowest employment rates in Middle East Asia, data showed that Emiratis are not publicly available. The rate climbed to 4.2 per cent in 2019 from 2.5 in 2012. Many experts believe that with this measure government is trying to make citizens alter their expectations, and work for long hours with less salary. An Emirati researcher at Oxford said that discontent in the country has been increasing especially after the govt scrapped the laws capping foreign ownership at 49 per cent. The debate sparked further after an advertisement for a "sandwich maker" at a Subway store was criticised prompting govt probe later. A user on Twitter said, "The lack of administrative, financial and technical jobs has led to 'sandwich maker'... Oh, what an age!" (With inputs from agencies) WATCH WION LIVE HERE

UAE urges private firms to hire nationals, offers 1-year paid leaves for govt employees to start business

After the success of India's first private train Tejas Express, the government is now planning to hand over the development of 50 railway stations and operations of about 150 trains to private players.

The government has also proposed to set up an Empowered Group of Secretaries to drive the process.

NITI Aayog CEO Amitabh Kant, in a letter, addressed to Railway Board Chairman VK Yadav, said, "As you are aware that the Railways Ministry was required to take up development of 400 railway stations and make them 'world-class'. Despite the aforesaid commitments, the actual implementation of the same has not happened except for a few isolated cases."

Kant further added that based on his discussions with the Union Railways Minister, a necessity was felt to develop 50 railway stations on a 'priority basis'.

"Considering the recent experience in the privatisation of 6 Airports, a similar process for setting up an Empowered Group of Secretaries to drive the process is required," read the letter dated October 7.

The Empowered Group of Secretaries is said to consist of CEO, Niti Aayog; Chairman, Railway Board; Secretary, Department of Economic Affairs and the Secretary of Ministry of Housing and Urban Affairs.

Kant further stated that the said Empowered Group of Secretaries may also be tasked to drive railway's initiative of bringing in private operators for passenger train operations in which about 150 trains are expected to be taken up in the first phase.

After the success of India's first private train Tejas Express, the government is now planning to hand over the development of 50 railway stations and operations of about 150 trains to private players.

After the success of India's first private train Tejas Express, the government is now planning to hand over the development of 50 railway stations and operations of about 150 trains to private players. The government has also proposed to set up an Empowered Group of Secretaries to drive the process. NITI Aayog CEO Amitabh Kant, in a letter, addressed to Railway Board Chairman VK Yadav, said, "As you are aware that the Railways Ministry was required to take up development of 400 railway stations and make them 'world-class'. Despite the aforesaid commitments, the actual implementation of the same has not happened except for a few isolated cases." Kant further added that based on his discussions with the Union Railways Minister, a necessity was felt to develop 50 railway stations on a 'priority basis'. "Considering the recent experience in the privatisation of 6 Airports, a similar process for setting up an Empowered Group of Secretaries to drive the process is required," read the letter dated October 7. The Empowered Group of Secretaries is said to consist of CEO, Niti Aayog; Chairman, Railway Board; Secretary, Department of Economic Affairs and the Secretary of Ministry of Housing and Urban Affairs. Kant further stated that the said Empowered Group of Secretaries may also be tasked to drive railway's initiative of bringing in private operators for passenger train operations in which about 150 trains are expected to be taken up in the first phase.

After Tejas Express, govt planning to privatise 50 railway stations and 150 trains

<a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/india-news/railways-needs-investment-of-rs-50-lakh-crore-by-2030-to-make-it-worlds-best-piyush-goyal-233681&amp;sa=U&amp;ved=2ahUKEwi49du-lrHjAhVMpY8KHRJPC_cQFjAGegQIABAC&amp;usg=AOvVaw2PRa79er7RsPwzDDwByBm6">Railway</a> Minister Piyush Goyal on Friday said there is "no question and no meaning" of privatising Railways, but the public-private partnership will be encouraged and there will be corporatisation of some units.

Replying to the debate on the demands for grants of his ministry, in which 99 members participated, Goyal outlined the plans of the government to boost safety and technology and said its performance has been far better compared to that of the UPA government.&nbsp;

He made a veiled attack on UPA chairperson Sonia Gandhi over her opposition to the corporatisation of the Modern Coach Factory in Rae Bareli and credited <a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/india-news/pm-modi-asks-mps-to-take-150-kilometres-march-on-gandhi-jayanti-234213&amp;sa=U&amp;ved=2ahUKEwjihtD0lrHjAhULUI8KHbPYDVk4ChAWMAN6BAgOEAI&amp;usg=AOvVaw2mq2heMNuhNTqHeRsM11JO">Prime Minister Narendra Modi</a> for its turnaround.

The Minister also accused the UPA government of "inaction" following the July 2006 train blasts and said if the government led by Prime Minister Narendra Modi was in power, terrorists would have gotten a befitting reply.

The House passed the demands for grants for railways (2019-20) after cut motions of the opposition were rejected by a voice vote.

Amid desk thumping by MPs of the treasury benches, Goyal said demands raised by members had been compiled overnight over 74 pages and he will individually write to the members.

He said capital expenditure of Railways had increased 2.5 times during the Modi government, adding that the current government had done away with the practice of a separate railway budget as they were mostly "political budgets.

"Slamming the UPA government, Goyal said the work for Dedicated Freight Corridor started in 2007, but not one kilometre of track linking had been done till 2014.&nbsp;

The NDA government completed 1900 kilometres of track linking in five years, he claimed.

The Railway Minister said track kilometre grew slowly in 64 years, while in the past five years it grew by 7,000 kilometres.&nbsp;

He also said railway stations were cleaner and train punctuality improved, as had the safety record of trains.

Goyal accused the <a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/india-news/congress-leaders-stage-protest-over-political-crisis-in-karnataka-and-goa-sonia-gandhi-meets-party-mps-234887&amp;sa=U&amp;ved=2ahUKEwjtr9OMl7HjAhXJL48KHeTlC90QFjAAegQIBRAC&amp;usg=AOvVaw2f5YP5GuPo2VEaiA-DDPZt">Congress party</a> of shedding "crocodile tears" over the corporatisation of some units, saying the Modi government was carrying forward a process that had been initiated earlier.&nbsp;

"Sometimes it is said we are going to privatise the railways.&nbsp;

We have spoken loudly so many times that nobody can privatise railways.

There is no meaning, no question of privatising railways," he said.

He said allegations about privatisation had been replied earlier and repeating them will not change the truth.&nbsp;

"The truth is that if you want to increase the facilities of railways, spread them to all parts of the country, we need big investments," he said.

Goyal said passengers want a comfortable journey and the capacity of railways to carry goods should increase.

"The government has decided that in the future it will encourage more public-private partnerships.&nbsp;

To increase route length, to bring foreign investment, we will corporatise some units.&nbsp;

You started it, we will complete the work you left half-finished. Why are you shedding crocodile tears that there is corporatisation?&nbsp;

We have been elected to complete the tasks you did not do," he said.

He said Finance Minister Nirmala Sitharaman has proposed an investment of Rs 50 lakh crore in railways and related areas in the next ten-twelve years and has laid a roadmap of how the railways will move forward.&nbsp;

Her budget speech, he said, reflected the "new thinking and new direction" in which the government will work.

He said not a single coach was produced at coach factory in Rae Bareli, the constituency of Sonia Gandhi, during the rule of Congress-led government.&nbsp;

The coach factory produced 1425 coaches in 2018-19 against its capacity of 1,000 due to Modi`s directions and the target was to make it the biggest coach factory in the world which produced 5,000 coaches annually, he added.

Sonia Gandhi had earlier this month opposed corporatisation of Modern Coach Factory and said it was the first step towards privatisation.

Replying to queries, he said some projects in West Bengal were pending for years as the land had not been made available by the state government.&nbsp;

Railway Minister Piyush Goyal on Friday said there is "no question and no meaning" of privatising Railways, but the public-private partnership will be encouraged and there will be corporatisation of some units.

Railway Minister Piyush Goyal on Friday said there is "no question and no meaning" of privatising Railways, but the public-private partnership will be encouraged and there will be corporatisation of some units. Replying to the debate on the demands for grants of his ministry, in which 99 members participated, Goyal outlined the plans of the government to boost safety and technology and said its performance has been far better compared to that of the UPA government. He made a veiled attack on UPA chairperson Sonia Gandhi over her opposition to the corporatisation of the Modern Coach Factory in Rae Bareli and credited Prime Minister Narendra Modi for its turnaround. The Minister also accused the UPA government of "inaction" following the July 2006 train blasts and said if the government led by Prime Minister Narendra Modi was in power, terrorists would have gotten a befitting reply. The House passed the demands for grants for railways (2019-20) after cut motions of the opposition were rejected by a voice vote. Amid desk thumping by MPs of the treasury benches, Goyal said demands raised by members had been compiled overnight over 74 pages and he will individually write to the members. He said capital expenditure of Railways had increased 2.5 times during the Modi government, adding that the current government had done away with the practice of a separate railway budget as they were mostly "political budgets. "Slamming the UPA government, Goyal said the work for Dedicated Freight Corridor started in 2007, but not one kilometre of track linking had been done till 2014. The NDA government completed 1900 kilometres of track linking in five years, he claimed. The Railway Minister said track kilometre grew slowly in 64 years, while in the past five years it grew by 7,000 kilometres. He also said railway stations were cleaner and train punctuality improved, as had the safety record of trains. Goyal accused the Congress party of shedding "crocodile tears" over the corporatisation of some units, saying the Modi government was carrying forward a process that had been initiated earlier. "Sometimes it is said we are going to privatise the railways. We have spoken loudly so many times that nobody can privatise railways. There is no meaning, no question of privatising railways," he said. He said allegations about privatisation had been replied earlier and repeating them will not change the truth. "The truth is that if you want to increase the facilities of railways, spread them to all parts of the country, we need big investments," he said. Goyal said passengers want a comfortable journey and the capacity of railways to carry goods should increase. "The government has decided that in the future it will encourage more public-private partnerships. To increase route length, to bring foreign investment, we will corporatise some units. You started it, we will complete the work you left half-finished. Why are you shedding crocodile tears that there is corporatisation? We have been elected to complete the tasks you did not do," he said. He said Finance Minister Nirmala Sitharaman has proposed an investment of Rs 50 lakh crore in railways and related areas in the next ten-twelve years and has laid a roadmap of how the railways will move forward. Her budget speech, he said, reflected the "new thinking and new direction" in which the government will work. He said not a single coach was produced at coach factory in Rae Bareli, the constituency of Sonia Gandhi, during the rule of Congress-led government. The coach factory produced 1425 coaches in 2018-19 against its capacity of 1,000 due to Modi`s directions and the target was to make it the biggest coach factory in the world which produced 5,000 coaches annually, he added. Sonia Gandhi had earlier this month opposed corporatisation of Modern Coach Factory and said it was the first step towards privatisation. Replying to queries, he said some projects in West Bengal were pending for years as the land had not been made available by the state government.

Railways Minister Piyush Goyal says no privatisation of Railways, targets Congress

India is open to listing ailing state carrier Air India, a government source said&nbsp;on Wednesday, after failing to attract buyers for a 76 percent stake in the company.

While the government is considering several proposals related to reviving the divestment process, it will not allow complete foreign ownership of the airline, the source said, declining to be named before a final decision is reached.

One of the proposals could involve the government retaining a share in the debt-laden carrier and selling it at a later date so it can capitalise on any financial upside that may occur from listing the airline, the source said.&nbsp;

The government may also consider reducing the debt it passes on to potential buyers and restructuring the large workforce, another senior government official told Reuters.

"We will take a decision in next few days on changing conditions before inviting fresh bids," the official said, adding that the government is committed to selling its stake in the national carrier in the current financial year but could defer it if it fails to get the right price.

The government in March finalised plans to divest a majority stake in Air India and offload about $5.1 billion of its debt, but prospective buyers stayed away, with some citing onerous terms as a reason for their lack of interest.

The lack of buyers in a booming aviation market underlines the challenges the government faces in fixing the debt-laden national carrier, and is a setback for Prime Minister Narendra Modi`s credentials as a reformer willing to step away from running money-losing businesses.

Air India, known for its Maharaja mascot, has some of India`s most lucrative international and domestic landing and parking slots that are key for airlines.

While a buyer would have got management control and gained access to more than 2,500 international slots and over 3,700 domestic slots, it would also have been required to take on Air India`s 27,000 employees, 40 percent of whom are permanent staff.&nbsp;

The terms had also stipulated that the government would have continued to hold a 24 percent stake, with the need for the bidder to abide by conditions, not yet detailed, designed to safeguard employee interests.

The government will soon arrange a bank loan for Air India, the second official said, to meet working capital needs and buy time for a few months before inviting fresh bids.

"The heavens would not fall if the stake sale is deferred to the next fiscal year," the official said adding that ahead of national elections next year, the government could not take the risk of selling the national carrier at a low price.&nbsp;

This could cost the government politically and hurt the process of further privatisation of other state companies, he said.

Government will not allow complete foreign ownership of the airline

India is open to listing ailing state carrier Air India, a government source said on Wednesday, after failing to attract buyers for a 76 percent stake in the company. While the government is considering several proposals related to reviving the divestment process, it will not allow complete foreign ownership of the airline, the source said, declining to be named before a final decision is reached. One of the proposals could involve the government retaining a share in the debt-laden carrier and selling it at a later date so it can capitalise on any financial upside that may occur from listing the airline, the source said. The government may also consider reducing the debt it passes on to potential buyers and restructuring the large workforce, another senior government official told Reuters. "We will take a decision in next few days on changing conditions before inviting fresh bids," the official said, adding that the government is committed to selling its stake in the national carrier in the current financial year but could defer it if it fails to get the right price. The government in March finalised plans to divest a majority stake in Air India and offload about $5.1 billion of its debt, but prospective buyers stayed away, with some citing onerous terms as a reason for their lack of interest. The lack of buyers in a booming aviation market underlines the challenges the government faces in fixing the debt-laden national carrier, and is a setback for Prime Minister Narendra Modi`s credentials as a reformer willing to step away from running money-losing businesses. Air India, known for its Maharaja mascot, has some of India`s most lucrative international and domestic landing and parking slots that are key for airlines. While a buyer would have got management control and gained access to more than 2,500 international slots and over 3,700 domestic slots, it would also have been required to take on Air India`s 27,000 employees, 40 percent of whom are permanent staff. The terms had also stipulated that the government would have continued to hold a 24 percent stake, with the need for the bidder to abide by conditions, not yet detailed, designed to safeguard employee interests. The government will soon arrange a bank loan for Air India, the second official said, to meet working capital needs and buy time for a few months before inviting fresh bids. "The heavens would not fall if the stake sale is deferred to the next fiscal year," the official said adding that ahead of national elections next year, the government could not take the risk of selling the national carrier at a low price. This could cost the government politically and hurt the process of further privatisation of other state companies, he said.

India open to listing Air India after failed divestment: Government source

The latest banking scam, this time in the Punjab National Bank to the tune of INR 11,000 crores, is yet another reminder of just how well the Indian economy is being managed in the interests of the super-wealthy. Over the years, and particularly during the boom years of the 2000s, when employment growth was negligible and &ldquo;jobless growth&rdquo; became a commonly used phrase, India&rsquo;s corporate elite, including some of its best-known business houses, went on a borrowing spree. They borrowed from private and public sector banks, they borrowed domestically and abroad. It is now clear that many of these loans were never intended to be repaid. The public sector banks, in particular, issued thousands of crores worth of loans without due diligence or even with active collaboration in the fraud.&nbsp;

Starting in the early years of this decade, the Reserve Bank of India itself was under pressure to do something about the building problem and started forcing public sector banks to reveal how many such loans were on their books. This is when the true extent of the problem, long-festering, started becoming apparent.&nbsp;

As per the recent estimates, there are around INR 10 lakh crores worth of bad loans in the Indian banking system. This number will likely rise. To gain a sense of proportion this is around 7% of India&rsquo;s GDP. The entire union budget for this year was INR 24.42 lakh crores and the fiscal deficit was around 6.2 lakh crores. This year&rsquo;s MGNREGA budget is INR 55,000 crores.

The amount of money borrowed by India&rsquo;s wealthy citizens in connivance with its officials with no intention of ever repaying it is larger than the amount that the union government spends on health, education, food and fuel subsidies, agriculture, rural and urban development, combined.&nbsp;

But this is not the end of the bad news for the country&rsquo;s ordinary citizens who still struggle for small amounts of credit to run their businesses and households. First, it is not known how much of this massive borrowing became a useful investment in the economy and how much was converted into unproductive foreign and domestic assets, as well as luxury consumption.

If the Nirav Modi case is any indication, then we may expect more the latter than the former. Second, not only have we paid once in the form of the opportunity cost of these loans, i.e. the alternative uses to which we could have put this credit, we are paying for it a second time in the form of the budget outlays on what is called bank recapitalisation. This is where the government uses its tax revenue to replace bad assets (loans that will never be repaid) with good ones. This allocation for the current budget was INR 2.11 lakh crores, larger than the allocation for many crucial development programs.

National outrage has understandably followed the latest revelations. But sadly, as expected, this has given the proponents of bank privatisation another excuse to push their agenda. Since the vast majority of bad loans in the banking system are on the books of the public sector banks, the solution seems simple. Privatise them. Make them subject to market discipline and such corruption and negligence will not occur. But this argument appealing to the power of the market to discipline finance can only be convincing to those who have been asleep through the 2008 financial crisis. The cronyism, corruption, conflicts of interest, and open fraud that were the hallmark of this crisis are very well-documented. That very few high profile convictions resulted is a testament to the power of the finance lobby in the United States and elsewhere than to the lack of evidence.&nbsp;

What makes us think that the equally, if not more, compromised Indian institutional climate will respond any better under a largely private banking sector than a public one? Privatisation of banks does not alter the fact that 1% of the richest Indians control nearly 60% of its wealth. Further, a private banking system is not the same as a competitive one. The US has the former, but no one would mistake it for the latter.

The PSU banks have to be reformed is clear. But &ldquo;reform&rdquo; is not a synonym for &ldquo;privatise.&rdquo; What we urgently need is public, accountable, and functional finance.

The country&rsquo;s permanently credit-starved micro, small and medium sector, including agriculture, can truly transform this economy if supported well. Their individual credit requirements are not high, but they are large in numbers. Such a situation is ideal for a distributed public banking system. The current high-handedness and lack of accountability in public banking is not an excuse to privatise it. It is an excuse to make it accountable locally. Something we have never attempted seriously. Banking performs the crucial function of linking savers with borrowers, those with capital to those who can use it. Further, having the power to create money by making loans, banks are endowed with one of the most powerful tools of development. There is no argument for making this incredible power beholden to elite interests. There is every argument for making it as decentralised and distributed as possible.

But what about the bad loans? Here too the choice is clear; whether to pursue those who stole the money and to retrieve it, or to pay for our theft ourselves. The answer should be obvious.

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

There are around INR 10 lakh crores worth of bad loans in the Indian banking system. This number will likely rise.

The latest banking scam, this time in the Punjab National Bank to the tune of INR 11,000 crores, is yet another reminder of just how well the Indian economy is being managed in the interests of the super-wealthy. Over the years, and particularly during the boom years of the 2000s, when employment growth was negligible and “jobless growth” became a commonly used phrase, India’s corporate elite, including some of its best-known business houses, went on a borrowing spree. They borrowed from private and public sector banks, they borrowed domestically and abroad. It is now clear that many of these loans were never intended to be repaid. The public sector banks, in particular, issued thousands of crores worth of loans without due diligence or even with active collaboration in the fraud. Starting in the early years of this decade, the Reserve Bank of India itself was under pressure to do something about the building problem and started forcing public sector banks to reveal how many such loans were on their books. This is when the true extent of the problem, long-festering, started becoming apparent. As per the recent estimates, there are around INR 10 lakh crores worth of bad loans in the Indian banking system. This number will likely rise. To gain a sense of proportion this is around 7% of India’s GDP. The entire union budget for this year was INR 24.42 lakh crores and the fiscal deficit was around 6.2 lakh crores. This year’s MGNREGA budget is INR 55,000 crores. The amount of money borrowed by India’s wealthy citizens in connivance with its officials with no intention of ever repaying it is larger than the amount that the union government spends on health, education, food and fuel subsidies, agriculture, rural and urban development, combined. But this is not the end of the bad news for the country’s ordinary citizens who still struggle for small amounts of credit to run their businesses and households. First, it is not known how much of this massive borrowing became a useful investment in the economy and how much was converted into unproductive foreign and domestic assets, as well as luxury consumption. If the Nirav Modi case is any indication, then we may expect more the latter than the former. Second, not only have we paid once in the form of the opportunity cost of these loans, i.e. the alternative uses to which we could have put this credit, we are paying for it a second time in the form of the budget outlays on what is called bank recapitalisation. This is where the government uses its tax revenue to replace bad assets (loans that will never be repaid) with good ones. This allocation for the current budget was INR 2.11 lakh crores, larger than the allocation for many crucial development programs. National outrage has understandably followed the latest revelations. But sadly, as expected, this has given the proponents of bank privatisation another excuse to push their agenda. Since the vast majority of bad loans in the banking system are on the books of the public sector banks, the solution seems simple. Privatise them. Make them subject to market discipline and such corruption and negligence will not occur. But this argument appealing to the power of the market to discipline finance can only be convincing to those who have been asleep through the 2008 financial crisis. The cronyism, corruption, conflicts of interest, and open fraud that were the hallmark of this crisis are very well-documented. That very few high profile convictions resulted is a testament to the power of the finance lobby in the United States and elsewhere than to the lack of evidence. What makes us think that the equally, if not more, compromised Indian institutional climate will respond any better under a largely private banking sector than a public one? Privatisation of banks does not alter the fact that 1% of the richest Indians control nearly 60% of its wealth. Further, a private banking system is not the same as a competitive one. The US has the former, but no one would mistake it for the latter. The PSU banks have to be reformed is clear. But “reform” is not a synonym for “privatise.” What we urgently need is public, accountable, and functional finance. The country’s permanently credit-starved micro, small and medium sector, including agriculture, can truly transform this economy if supported well. Their individual credit requirements are not high, but they are large in numbers. Such a situation is ideal for a distributed public banking system. The current high-handedness and lack of accountability in public banking is not an excuse to privatise it. It is an excuse to make it accountable locally. Something we have never attempted seriously. Banking performs the crucial function of linking savers with borrowers, those with capital to those who can use it. Further, having the power to create money by making loans, banks are endowed with one of the most powerful tools of development. There is no argument for making this incredible power beholden to elite interests. There is every argument for making it as decentralised and distributed as possible. But what about the bad loans? Here too the choice is clear; whether to pursue those who stole the money and to retrieve it, or to pay for our theft ourselves. The answer should be obvious. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Opinion: After Nirav Modi frauds PNB, are we to pay for our theft ourselves?

Pakistan will try to privatise its national airline before general elections due this year, privatisation minister Daniyal Aziz said, as the ruling party seeks to restart sales of state-run businesses.

Pakistan International Airlines(PIA), haemorrhaging money and losing market share to Gulf-based rivals such as Etihad and Emirates, has been hit by management turmoil in recent years and a 2016 plane crash that led to 47 deaths.

The privatisation of loss-making entities that were draining the exchequer was a key priority for the Pakistan Muslim League-Nawaz (PML-N) party when it swept to power in 2013.

PIA was among 68 state-owned companies earmarked for privatisation in return for a $6.7 billion International Monetary Fund package that helped Pakistan to stave off a default in 2013.

Despite some initial success, the process stalled in 2016 after staff protests caused havoc with PIA operations and the government passed a law that effectively made it impossible to privatise the airline.

But Aziz, chairman of the Privatisation Commission, told Reuters that new plans have been drawn up to sell off PIA and he would take the proposals to the cabinet committee on privatisation, chaired by Prime Minister Shahid Khaqan Abbasi.

&quot;Next step would be going to the cabinet committee ... and that&#39;s imminent, maybe even next week,&quot; Aziz said in his Islamabad office this week.

The new plans focus on splitting up the carrier, with the core airline business being separated from vast peripheral operations such as catering, hotels and maintenance, Aziz said. The core airline would then be sold.

Heavy losses

But to complete the transaction, Aziz said, the government would have to pass laws in parliament to reverse the 2016 legislation that converted PIA into a limited company and effectively barred the government from giving up management control.

The impetus to sell PIA has grown as the airline has piled up huge losses estimated by its former CEO in March at about $30 million a month. Total debt stood at 186 billion rupees ($1.8 billion) at the end of 2016.

When asked how soon could a buyer could acquire PIA, Aziz said: &quot;Tomorrow morning. If you have the money, come and buy it.&quot;

Aziz gave no indication of an expected valuation.

Both Emirates and Etihad had shown interest in buying PIA before the government backed down from privatisation in 2016, the English-language Express Tribune newspaper reported, citing an unnamed official.

Analysts have been sceptical about the government&#39;s ability, or willingness, to take on powerful unions and embark on a privatisation process so close to general elections likely in July or August.

Aziz said that owing to time restraints ahead of the elections, the privatisation commission will focus on one state company per sector, including a bank and an energy company.

He added that there has been &quot;huge interest&quot; in buying Pakistan Steel Mills, once the pride of Pakistan&#39;s industrial output but now shut and bleeding cash.

&quot;We will get runs on the board, but the real challenge is to bring to fruition the two big animals: one is PIA and the other one is Steel Mills,&quot; Aziz said.

The privatisation of loss-making entities that were draining the exchequer was a key priority for the Pakistan Muslim League-Nawaz (PML-N) party when it swept to power in 2013.

Pakistan will try to privatise its national airline before general elections due this year, privatisation minister Daniyal Aziz said, as the ruling party seeks to restart sales of state-run businesses. Pakistan International Airlines(PIA), haemorrhaging money and losing market share to Gulf-based rivals such as Etihad and Emirates, has been hit by management turmoil in recent years and a 2016 plane crash that led to 47 deaths. The privatisation of loss-making entities that were draining the exchequer was a key priority for the Pakistan Muslim League-Nawaz (PML-N) party when it swept to power in 2013. PIA was among 68 state-owned companies earmarked for privatisation in return for a $6.7 billion International Monetary Fund package that helped Pakistan to stave off a default in 2013. Despite some initial success, the process stalled in 2016 after staff protests caused havoc with PIA operations and the government passed a law that effectively made it impossible to privatise the airline. But Aziz, chairman of the Privatisation Commission, told Reuters that new plans have been drawn up to sell off PIA and he would take the proposals to the cabinet committee on privatisation, chaired by Prime Minister Shahid Khaqan Abbasi. "Next step would be going to the cabinet committee ... and that's imminent, maybe even next week," Aziz said in his Islamabad office this week. The new plans focus on splitting up the carrier, with the core airline business being separated from vast peripheral operations such as catering, hotels and maintenance, Aziz said. The core airline would then be sold. Heavy losses But to complete the transaction, Aziz said, the government would have to pass laws in parliament to reverse the 2016 legislation that converted PIA into a limited company and effectively barred the government from giving up management control. The impetus to sell PIA has grown as the airline has piled up huge losses estimated by its former CEO in March at about $30 million a month. Total debt stood at 186 billion rupees ($1.8 billion) at the end of 2016. When asked how soon could a buyer could acquire PIA, Aziz said: "Tomorrow morning. If you have the money, come and buy it." Aziz gave no indication of an expected valuation. Both Emirates and Etihad had shown interest in buying PIA before the government backed down from privatisation in 2016, the English-language Express Tribune newspaper reported, citing an unnamed official. Analysts have been sceptical about the government's ability, or willingness, to take on powerful unions and embark on a privatisation process so close to general elections likely in July or August. Aziz said that owing to time restraints ahead of the elections, the privatisation commission will focus on one state company per sector, including a bank and an energy company. He added that there has been "huge interest" in buying Pakistan Steel Mills, once the pride of Pakistan's industrial output but now shut and bleeding cash. "We will get runs on the board, but the real challenge is to bring to fruition the two big animals: one is PIA and the other one is Steel Mills," Aziz said.

Pakistan aims to sell national airline PIA before election

privatisation

Privatisation, News on Privatisation, stories on Privatisation, articles on Privatisation, Privatisation stories at Wion, Privatisation news, Privatisation latest news