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Informist, Wednesday, Mar. 18, 2026

 

NEW DELHI – Expressing "deep concern" over vacancies in the finance ministry's Department of Investment and Public Asset Management, the Parliamentary Standing Committee on Finance said the government must appoint more officials to execute complex transactions like the stake sale of IDBI Bank Ltd. or finalise public sector enterprises' memoranda of understanding. The lack of strength "severely jeopardises" the Department's role, the committee said.

 

"...despite overseeing an ambitious value maximisation agenda, (DIPAM) has been allocated a modest budget of 55.92 crore (INR 559.2 million) and is operating with a crippling 43% vacancy rate," the committee's report said. The department currently has only 51 officers against a sanctioned strength of 89, with "critical shortages" at the 'Director' and 'Under Secretary' levels. "Such significant manpower shortages in a field requiring highly specialised financial and legal expertise undermine the Department's capacity to effectively manage the disinvestment target and the recycling of prime real estate assets," it said. 

 

The standing committee's report comes just days after the government faced defeat in its much-touted IDBI Bank privatisation. The privatisation plan has come to a halt as financial bids received were below the reserve price set for the transaction. The reserve price is the minimum price sought to carry out a transaction involving the sale of shares. This development technically means that the government would have to redraw the privatisation plan for the bank and repeat the entire process. 

 

Currently, the government holds 45.48% stake in the bank, and LIC, the promoter, holds 49.24%. After the proposed strategic sale, the government's stake in the bank would have come down to 15% and LIC's to 19%. 

 

The government had sought initial bids from interested investors for IDBI Bank in October 2022. Bids received for the transaction coming below the reserve price, however, also meant that the government's privatisation bid would have been defeated yet again. If IDBI Bank were privatised, it would be only the second strategic disinvestment the government has succeeded in, after Air India. It would have also marked the government's first successful bank privatisation. 

The government has set an ambitious miscellaneous capital receipts target of INR 800 billion for 2026-27 (Apr-Mar), more than double the target of INR 338.37 billion for this fiscal. Having met its divestment target only twice in the past decade, the IDBI Bank stake sale would have helped the government meet the disinvestment target for FY27.

 

The government has also been trying to monetise non-core assets of public sector undertakings to let go of properties with little or no business activities. The push to monetise these unused assets also came as a fallout of the government's little success in privatisation and disinvestment of state-owned entities. The National Land Monetization Corp., a special purpose vehicle set up in 2022, was in fact formed to undertake monetisation of surplus land and assets of public sector enterprises. Even this special purpose vehicle has been working in an ad-hoc manner, with the secretary of the Department of Public Enterprises having to assume the role of chairman after it was vacant for years. 

 

The standing committee also pointed towards the "systemic governance deficit" across public-sector companies, characterised by a "triple crisis" of leadership vacancies, funding shortfalls, and state capability gaps. As of February 2026, 53 public-sector companies, including strategic entities such as Bharat Petroleum Corp. Ltd. and BSNL, are operating without regular chairpersons and managing directors, relying on temporary "additional charge" arrangements, it said. 

 

The committee suggested that the Public Enterprises Selection Board's selection processes must begin 12 months in advance of a scheduled retirement to ensure seamless transitions and avoid the prolonged use of additional charges.  End

 

Reported by Priyasmita Dutta

Edited by Tanima Banerjee

 

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