NBCC, MTC, Hudco: Centre puts privatisation on hold, to pump billions into struggling PSUs

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The Ministry of Finance has hit pause on privatising at least nine state-owned companies, putting the process ‘in abeyance’, Reuters reported on Monday. The move was taken after opposition from relevant ministries.

The decision, which impacts firms like Madras Fertilizers, Fertilizer Corp of India, MMTC, and NBCC, highlights a shift in strategy as the Centre turns to rescue and revival plans for struggling Public Sector Units (PSUs).  

The government has plans to commit $1.5 billion in financial packages for two state-owned companies after failing to sell them. Among them is helicopter operator Pawan Hans, which is set to receive $230 million to $350 million to modernise its aging fleet after four unsuccessful attempts to find a buyer.

Last month, Pawan Hans reportedly submitted a proposal to the Centre for acquiring 23 new helicopters to replace its ageing fleet comprising 42 helicopters.

Housing and Urban Development Corp (HUDCO), which was also identified for privatisation, has now been ‘exempted’ which means it will not be sold, according to Reuters. 
 
The move away from privatisation is a significant departure from the ambitious policy announced in 2021, which aimed to drastically reduce the state’s role in business. Under the plan, the government sought to sell off most state-owned companies, retaining only a minimal presence in sensitive sectors like banking and telecom. However, resistance from ministries, employee unions, and political allies has stalled progress.  

So far, only three major privatisation deals have been completed. These include Air India’s sale to the Tata Group and stakes in steelmaker Neelachal Ispat Nigam Ltd and Ferro Scrap Nigam. Key sales like Bharat Petroleum Corporation, Shipping Corporation of India, and BEML remain stuck due to complications such as land transfer issues and the lack of private buyers.  

The Centre’s U-turn also reflects hopes that overhauling state-run firms could make them profitable, providing a steady stream of dividend income. However, this shift has also been influenced by political realities — Prime Minister Narendra Modi, who returned to power in 2024 with coalition support, faces mounting opposition to privatisation from regional allies. 


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