A social media post asserts that Narendra Modi is the only Prime Minister in India’s history who hasn’t established a single government company yet has sold 23 government companies (here & here). In this article, we fact-check the accuracy of this claim.
Claim: Prime Minister Modi led BJP government hasn’t established a single government company yet sold 23 government companies.
Fact: Since the introduction of the new economic policy in 1991, successive governments have undertaken disinvestment in public sector undertakings. From 1991-92 to 2023-24, disinvestment in public sector enterprises occurred 350 times, raising a total of ₹5,82,326.08 crores. Further, between 2014 and 2019, when Modi was Prime Minister, 63 new public sector organizations were created under various ministries. Hence, the claim made in the post is MISLEADING.
Disinvestment:
Disinvestment refers to the act of selling or liquidating assets. Specifically, it involves reducing the government’s ownership stake in a Public Sector Undertaking (PSU). This process is often driven by the goals of enhancing the enterprise’s efficiency and providing fiscal support. Additionally, governments use disinvestment as a strategy to finance fiscal deficits. Typically, governments disinvest in public sector enterprises through three main methods.
- Minority Disinvestment: The government retains a majority stake, usually over 51%, to maintain management control.
- Majority Divestment: The government transfers control to the acquiring entity while keeping a partial stake.
- Complete Privatization: The government transfers 100% control of the company to the buyer.
Since the introduction of the new economic policy in 1991, successive governments have undertaken disinvestment in public sector undertakings. From 1991-92 to 2023-24, disinvestment in public sector enterprises has occurred 350 times, raising a total of ₹5,82,326.08 crores.
In 1991-92, under the Congress regime, the government sold shares in 31 PSUs, raising ₹3,038 crores. During Manmohan Singh’s tenure as Prime Minister from 2004 to 2014, disinvestment occurred 42 times across various PSUs. Similarly, during Narendra Modi’s tenure as Prime Minister from 2014 to 2024, disinvestment was made 179 times in various PSUs.
In response to questions about the disinvestment of Central Public Sector Enterprises (CPSEs), the government informed Parliament that “since 2016, has given ‘in-principle’ approval for strategic disinvestment of 36 cases of PSEs and/or Subsidiaries/ Units/ Joint Ventures of PSEs/ Bank. Out of the 36 cases, strategic disinvestment transactions have been completed in 10 cases.”
The graph below illustrates the disinvestment targets achieved by the government from 2009 to 2021, indicating that disinvestments have been carried out regardless of the ruling party, not just under the Modi administration.
Incorporation of new enterprises since 2014:
Contrary to the viral claim, the Modi led BJP government also established public sector enterprises. According to official data, between 2014 and 2019, when Modi was Prime Minister, 63 public sector organizations were created under various ministries (here).
In Parliament, the government stated, “According to the Public Enterprises Survey, the number of operational Central Public Sector Enterprises (CPSEs) was 236 in 2014-15 and has increased to 248 in 2021-22.”
To sum up, not only disinvestment, the Modi led BJP government has also incorporated public sector enterprises.
