In view of the Lok Sabha elections, there are fears that banks will be privatized next year

Mumbai: While disinvestment activity in the country is expected to slow down in the next financial year, the process of privatization of two public sector banks is also set to remain challenging.

Finance Minister Nirmala Sitharaman announced the privatization of two public sector banks in the 2022 budget. The NITI Aayog is also believed to have finalized the names of two banks, but there has been no move to privatize them. The finance minister also announced the privatization of a general insurance company.

As the Lok Sabha elections are scheduled in the country in 2024, the government will move slowly in the disinvestment activity, but the government does not want to rush the privatization of banks, said an analyst of a rating agency.

The government is currently in limbo over privatization as a result of protests by banking sector employees.

The government has not been able to achieve its disinvestment target in the current financial year as a result of market volatility. The government had to reduce the disinvestment target of Rs 65,000 crore to Rs 50,000 crore for the current financial year. The disinvestment target for the next financial year has been set at Rs 51,000 crore.

To meet its capital expenditure programme, the government plans to raise Rs 35,000 crore to Rs 40,000 crore from railway assets in the next financial year.