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India can make state companies efficient without privatizing or shutting them, Prime Minister Narendra Modi said, indicating his government will look beyond its previously stated aim of selling off large stakes in such entities.

"Do we have only two options? Either disinvest them or shut them down?" Modi said in a speech at the Hindustan Times Summit in New Delhi. "Isn’t there a third option of corporatizing them, changing its work culture and bringing efficiency?"

The government has budgeted to raise $4 billion through " strategic sales" of state companies for the year through March 31. Private investors could gain management control through such transactions, which had been used by previous governments for companies including Bharat Aluminium Co. and Hindustan Zinc Ltd.

After years of losses, India’s state-run shipping company had not only turned the corner but will end up posting a profit this year, Modi said.

So far this fiscal year, the government has been able to raise only about a fifth of its full-year stake sale target of 695 billion rupees, which includes 285 billion rupees through strategic sales. The goal is almost triple of what the government earned in the previous 12 months.

— With assistance by Unni Krishnan