The Reserve Bank of India has reportedly certified bidders for IDBI Bank as “fit and proper”, paving the way for the government to sell a big equity stake in the bank. RBI’s fitness and propriety norms are meant to ensure that bidders are compliant with all the rules. With this long-awaited clearance out of the way, the Centre will now grant qualified bidders access to confidential bank data for their assessment.
This is a shot in the arm for India’s languishing disinvestment programme, which got short shrift in the interim budget. Pleased with large dividends from state-run companies, New Delhi was thought to have lost its ardour for stake sales. In 2023-24, the Centre got ₹63,749.3 crore as dividends, but raised only ₹16,507.3 crore by offloading equity. Movement on IDBI has raised the hope that this part of the reform agenda will be given greater priority.
That public sector enterprises are performing well is not a good argument to retain ownership. It’s a question of whether the state should be running businesses in non-strategic sectors. It should not. But the real test of adherence to this ideal is whether the government withdraws from markets that are best left to the private sector.