Can't milk PSUs once they are sold.

"The Indian government has plans to raise as much as 3.25 trillion rupees ($47.4 billion) in the next five years by reducing its stakes in some large state owned firms to 40 percent, two senior government officers told Reuters, in the nation's biggest privatisation push in more than two decades." We are not told if these are going to be genuine sales to private investors or the usual flimflam of taking money from one pocket and putting it into another and showing it as revenue, as it did with the so-called sale of HPCL to ONGC for Rs 369.15 billion and the sale of the Rural Electrification Corporation to Power Finance Corporation for Rs 145 billion. All four are public sector firms. The acquisitions were financed by loans from banks which was shown as revenue. This was called 'prestidigitation' by Chetan Ghate. "Fiscal 'presdigitation' or sleight of hand may contribute to our own version of a 'doom-loop', i.e., by pushing expenditure off budget to meet deficit targets and then recourse to borrowing from the national small savings fund by state entities keeps administrative interest rates high to incentivise such savings. This impedes monetary transmission." "With total public sector borrowing almost 9 percent of GDP, the public sector is eating up virtually all household financial savings," agreed SZ Chinoy. This pushes up interest rate on government bonds "with the 10-year yield stubbornly remaining 120 bps over the policy rate despite a slowing economy and a rate cutting cycle". The government should raise funds through "aggressively targeted asset sales of 1 percent of GDP". "The second Narendra Modi government does not have enough fiscal space to stimulate economic activity," wrote N Rajadhyaksha. "A sharp increase in government spending at this juncture could once again unsettle the bond market. On the other hand, a sharp cut in the fiscal deficit this year will worsen the growth slowdown." So, "the government should go for an aggressive program of asset sales and use the proceeds to build new infrastructure." The Comptroller and Auditor General (CAG) "highlighted the way massive dues to the Food Corporation of India (FCI), kept going up year after year, as well as dues to the National Bank of Agriculture and Rural Development (Nabard) and the fertiliser subsidy account," wrote SSA Aiyer. This means that central government debt is not 45.5% of GDP, as we are told, but 50.5%. The government has to find ways of encouraging long term household savings in pensions and insurance if it is to stimulate growth rate, wrote Prof Ila Patnaik. "The household savings rate declined from 22.4% in 2012 to 17.2% in 2017." If the government's stake in public sector units (PSUs) come down to 40% how will it force them to pay higher dividends at whim? Private companies and individuals will not be easily plundered. Maybe, that's why it is thinking of borrowing from foreign countries. A jump over the financial precipice.