IDBI Bank stake sale; Rs 53,428 crore welfare package: Key decisions by Union cabinet

NEW DELHI: The Union cabinet on Wednesday approved the sale of a 60.72 per cent stake in IDBI Bank to Fairfax Financial Holdings for Rs 52,877 crore and a five-year extension of national social security schemes with an outlay of Rs 53,428 crore. It also approved a 78-day productivity-linked bonus worth Rs 2,009 crore for railway employees.The decisions cover financial sector restructuring, welfare support for vulnerable sections and festive-season payments for railway workers.The IDBI Bank disinvestment is the largest such exercise since the sale of Air India. The government said the strategic partnership would bring fresh capital into the lender and support the growth of India's financial services sector.The social security package will cover 3.20 crore beneficiaries across all 36 States and Union Territories. It will run from 2026-27 to 2030-31 under a revised framework that expands disability pension eligibility and renames several existing welfare schemes.The railway bonus will benefit 11.4 lakh employees ahead of the festive season.IDBI Bank stake sale to bring fresh capitalThe cabinet approved the strategic disinvestment of a 60.72% stake in IDBI Bank to Fairfax Financial Holdings for Rs 52,877 crore. The transaction marks a major step in the restructuring of the lender, which has played a significant role in financing India's industrial development.Union minister Ashwini Vaishnaw said the decision was significant for the financial sector, particularly for MSMEs and emerging industries."A major decision has been taken regarding the financial sector, specifically concerning IDBI, an institution crucial for the growth of our MSMEs and new industries. A decision has been made to undertake the strategic restructuring of IDBI," he said.Vaishnaw said India's rapid economic growth had increased the need for capital to help businesses expand."Given the rapid pace of India's growth, there is a significant need for growth capital," he said.He added that the government had selected a strategic partner for IDBI Bank, which has played an important role in India's industrial development."A strategic partner has been selected for the Industrial Development Bank, an institution that has played a pivotal role in industrial development," Vaishnaw said.The partnership, he said, would bring fresh capital into the lender and help attract foreign investment into the financial services sector."This partnership will facilitate the infusion of new capital and pave the way for the largest FDI inflow into India's financial services sector," he said.Vaishnaw said the government and the Life Insurance Corporation of India (LIC) would jointly retain a 34% stake in the restructured entity."The Government of India and LIC will jointly retain a 34% stake in the restructured entity," he said.He added that retaining the stake would increase the value of their holdings."Retaining this 34% stake will significantly enhance the value of the holdings held by both the Government of India and LIC," Vaishnaw said.He described the transaction as an infusion of fresh capital into IDBI Bank and the wider financial services sector."In a sense, fresh capital is being infused into IDBI and the financial services sector," he said.Vaishnaw said the move would create growth opportunities for small businesses, entrepreneurs and companies looking to expand into services."This move will create new growth opportunities, particularly for MSMEs, small industries, new entrepreneurs, and those entering the services sector or looking to expand, while also serving as a major opportunity to attract FDI into financial services," he said.Social security schemes extended for five yearsThe Cabinet also approved a five-year extension of the National Social Assistance Programme (NSAP), with a total outlay of Rs 53,428 crore for 2026-27 to 2030-31.The programme will benefit 3.20 crore people across all 36 States and Union Territories. It supports vulnerable households through pension and family assistance schemes, including provisions for senior citizens, widows and people with disabilities.The revised framework includes changes to disability assistance. Disability benefits will now be available from birth, instead of requiring beneficiaries to reach the age of 18. The government has also revised the eligibility criteria, coverage and assistance rates for pensions for persons with disabilities, referred to as Divyangjan.The changes are intended to widen access to support and bring more eligible beneficiaries under the social security framework.Five welfare schemes get new namesAs part of the social security package, the Cabinet approved new names for the NSAP and four of its major schemes. The programmes are being renamed as follows:National Social Assistance Programme (NSAP): Pradhan Mantri Samajik Sahayata Yojana.Indira Gandhi National Old Age Pension Scheme (IGNOAPS): Pradhan Mantri Vridhavastha Pension Yojana.Indira Gandhi National Widow Pension Scheme (IGNWPS): Pradhan Mantri Vidhawa Pension Yojana.Indira Gandhi National Disability Pension Scheme (IGNDPS): Pradhan Mantri Divyangjan Pension Yojana.National Family Benefit Scheme: Pradhan Mantri Parivar Labh Yojana.The changes cover pension support for older people, widows and persons with disabilities, as well as financial assistance under the family benefit scheme.The government said the existing pension schemes for senior citizens and widows, along with the family benefit scheme, would continue in their current structure alongside the renamed programmes.The extension and revisions form a major part of the Cabinet's welfare decisions. The revised disability provisions are among the key changes, as they remove the earlier age threshold of 18 years for accessing disability benefits.Rs 2,009 crore bonus for 11.4 lakh railway employeesThe cabinet also approved a productivity-linked bonus of Rs 2,009 crore for 11.4 lakh railway employees. The bonus will cover 78 days and is intended to reach workers ahead of the upcoming festive season.Productivity-linked bonuses are paid to eligible railway employees as an incentive linked to performance. The latest approval will provide a financial boost to railway workers before the festival period.The three decisions together cover a major bank disinvestment, an extended social security programme and a bonus payment for railway employees. They combine the government's push to attract investment into financial services with continued welfare support and payments to a largeYou use AI every day. Now get your AI Quotient. Take the AIQ test.