Govt., to cut process time for Stake Sale in 35 CPSES
04, Feb 2019
Prelims level : Mains level :
- With 35 Central Public Sector Enterprises (CPSEs) being lined up for strategic sale, the Finance Ministry is planning to streamline processes to cut down the time for the outright sale of such state-owned companies.
- Taking from the example of the ongoing strategic sale of Pawan Hans (A mini ratna government of India enterprise), the Department of Investment and Public Asset Management (DIPAM) is keen that the long-drawn sale process of CPSEs be simplified so that more than one company could be taken up for the sell-off simultaneously.
- Government is going to correct the procedure (for strategic sale). It is a bit long and long winding, which was okay initially as government had to take a lot of precautions. Now also government will take precaution, but now government has experience and understands how to go ahead.
- NITI Aayog recently submitted to the DIPAM the fifth list of CPSEs, profitable as well as non-profitable, which can go in for a strategic sale. This takes the total number of CPSEs identified for strategic disinvestment to 35.
- The companies which have been shortlisted for strategic sale include Air India, Air India subsidiary AIATSL, Dredging Corporation, BEML, Scooters India, Bharat Pumps Compressors, and Bhadrawati, Salem and Durgapur units of steel major SAIL.
- The other CPSEs for which approvals are in place for outright sale include Hindustan Fluorocarbon, Hindustan Newsprint, HLL Life Care, Central Electronics, Bridge & Roof India, Nagarnar Steel plant of NMDC and units of Cement Corporation of India and ITDC
Policy on strategic disinvestment:
- Strategic disinvestment by way of sale of substantial portion of Government shareholding in identified CPSEs upto 50 per cent or more, alongwith transfer of management control.
- To be undertaken through a consultation process among different Ministries/Departments, including NITI Aayog.
- NITI Aayog to identify CPSEs for strategic disinvestment and advice on the mode of sale, percentage of shares to be sold of the CPSE and method for valuation of the CPSE.
- The Core Group of Secretaries on Disinvestment (CGD) to consider the recommendations of NITI Aayog to facilitate a decision by the Cabinet Committee on Economic Affairs (CCEA) on strategic disinvestment and to supervise/monitor the process of implementation.
- Helicopter services provider Pawan Hans is a joint venture between the government and ONGC. The government holds 51 per cent stake while state-owned ONGC owns the remaining 49 per cent shareholding. Pawan Hans has a fleet of 46 choppers.