Common wisdom is that disinvestment in India was on a high back in the days when Atal Behari Vajpayee was Prime Minister, when there was a dedicated Ministry of Disinvestment under Arun Shourie. The UPA, upon coming to power in 2004, disbanded this ministry and common wisdom is that disinvestment stopped as a result of that.
Here, we take a look at disinvestment in India over the years. Here is the total disinvestment amount by year:
You can see that there was a spike in disinvestment in 2003-04, which was Vajpayee’s last year as Prime Minister. You can also see that disinvestment ground to a halt in the first term of the UPA government – possibly as a result of the presence of the Left Front as part of the government. However, you may not have realized that in its second avatar the UPA government has taken up disinvestment with a vengeance, with the receipts in the last four years far exceeding the receipts during Vajpayee’s tenure as Prime Minister.
However, the picture becomes clear if we look at the method of disinvestment. Most disinvestment receipts in the 1990s and in the last five years have come through a sale of minority stakes in PSUs. The disinvestment receipts in the Vajpayee years, however, came mostly through majority stake sales and strategic sales. In other words, there has been no big bang disinvestment in the last ten years – the money the government has made is through quiet sales of minority stakes in PSUs. So one can say that big bang disinvestment has ground to a halt after Vajpayee’s tenure.