Disinvestment

Story hook

It is 27 January 2022. Air India — the airline founded by JRD Tata in 1932 as Tata Airlines, nationalised in 1953, then mismanaged through 60 years of public ownership accumulating Rs.85,000 crore in debt — returns to Tata Sons. After 18+ years of attempted privatisation, 2 failed auctions (2018, 2019), and Rs.6,500 crore in annual losses to the public exchequer, the Modi government finally sells 100% of Air India to Tata Sons for Rs.18,000 crore (~$2.4 billion). The handover ceremony at the Taj Mahal Hotel sees an emotional Ratan Tata declare: "Welcome back, Air India".

Air India is the largest single PSU privatisation since VSNL (2002). It signals a renewed push by the government to exit non-strategic sectors. In the same FY 2021-22, the government raised Rs.13,531 crore through disinvestment — well below the Rs.1.75 lakh crore budgetary target. Disinvestment has been a recurring fiscal theme of every government since the 1991 BoP crisis, but actual progress has been uneven.

For UPSC, disinvestment + PSU privatisation appears in every Mains GS-III economy paper. The themes: NITI Aayog's role, the distinction between strategic vs non-strategic sectors, IDBI Bank sale, BPCL privatisation attempt (cancelled 2022), LIC IPO 2022, and the broader question of state vs market in Indian economy.

Why this matters for UPSC

For UPSC:

• Prelims: Phases of disinvestment, NITI Aayog, DIPAM, recent privatisations (Air India, IDBI in progress), Strategic Sector Policy 2021.
• Mains GS-III: Disinvestment vs privatisation debate, fiscal vs strategic objectives, market response, sectoral debates.

This file covers history of disinvestment, current framework, institutional setup, major privatisations, key debates.