The arrival of the Omicron variant of Covid is likely to derail the Centre’s privatisation plan again with the latest restrictions to check the spread of infections may put brakes on the selloff process. Further, it will make it difficult to achieve the disinvestment target of Rs 1.75 lakh crore in the current financial year.

The Department of Investment and Public Asset Management (DIPAM), entrusted with the disinvestment programme, has successfully carried out the big-ticket privatisation of loss-making Air India and several other transactions are in an advanced stage of being concluded, according to a report in ToI. Since 2003-04, a landmark divestment concluded last year when the beleaguered national airline was sold to the Tatas.

The DIPAM’s plan could suffer a blow from the Omicron variant as a rapid surge in cases has forced state governments to bring back curbs on public mobility and encourage remote work arrangements, which will make physical meetings difficult. Also, the first two waves of the pandemic had had an adverse impact on the privatisation process and had led to disruptions and missed targets.

While Dipam had held virtual meetings to continue work on some of the transactions, the restrictions due to the surge in infections did have an impact. At present, the country is in the throes of a third wave of the ongoing Covid-19 pandemic, and it is likely to disrupt plans for any physical meetings with potential investors. Officials will function on the virtual mode to carry out work on the transactions that are incomplete. 

So far, the government has garnered Rs 9,330 crore from minority stake sales in state-run entities and Rs 35,117 crore in dividend receipts and is far away from the overall target. With just three months left in the current fiscal year, it seems to be a Herculean task to attain the target, the publication mentioned.

After the successful sale of Air India, Dipam had drawn up plans to conclude sales of BEML, Shipping Corporation of India and Pawan Hans.