Guidelines for implementation of the new Public Sector Enterprises Policy for CPSEs (Central Public Sector Enterprises) have been notified on 13th December, 2021.
The sale of Air India will boost India’s privatization drive, the Economic Survey said on Monday, as it suggested redefining the role of the public sector in business enterprises to encourage private participation in all sectors. The government had earlier this month handed over ownership rights in national carrier Air India to the Tata group for Rs 18,000 crore. This amount includes acquisition of debt burden of Rs 15,300 crore and cash of another Rs 2,700 crore.
“This progress on the privatization of Air India is particularly significant, not only in terms of proceeds from disinvestment but also in terms of boosting the privatization drive,” the survey said. This is the first privatization in 20 years and will pave the way for the sale of more CPSEs, which are up for sale – BPCL, Shipping Corporation, Pawan Hans, IDBI Bank, CONCOR, BEM and RINL. Since 2016, the Government has given ‘in-principle’ approval for strategic disinvestment of 35 CPSEs and/or subsidiaries/units/joint ventures of CPSEs and IDBI Bank.
“To realize the mission of a new, self-reliant India, there was a need to redefine public sector participation in business enterprises and encourage private sector participation in all sectors,” the survey said. The government had last year approved a policy of strategic disinvestment of public sector enterprises which would provide a clear roadmap for disinvestment in all non-strategic and strategic sectors. Guidelines for implementation of the new Public Sector Enterprises Policy for CPSEs have been notified on 13th December, 2021.
“This will enable the government to utilize the disinvestment proceeds for funding various social sector and developmental programmes, while disinvestment will infuse private capital, technology and best management practices into the disinvested CPSEs,” it said. The new PSE policy envisages classification of CPSEs into strategic and non-strategic sectors and exempted certain CPSEs such as non-profit companies from the purview of the policy.
The strategic areas as per the policy are nuclear energy; space and defense; transport and telecommunications; Power; petroleum; coal and other minerals; Banking, insurance and financial services. Under the four broad baskets classifying strategic sectors – i.e. national security, critical infrastructure, energy and minerals and financial services – only minimal presence of CPSEs in the above strategic sectors is to be maintained. Non-strategic CPSEs will be privatized or otherwise closed.
“Thus, the policy on public sector enterprises provides a clear path for disinvestment in all non-strategic and strategic sectors and reinforces the idea of minimum government – maximum governance,” the survey said.
Stating that the emphasis has been on disinvestment in the last 5 years, the survey said that after 2014, the disinvestment policy should be changed to stake in PSUs, such as Hindustan Petroleum Corporation Limited (HPCL), Rural Electrification Corporation Limited (REC) Was refurbished with the sale. , Dredging Corporation of India Limited (DCIL), Hospital Services Consultancy Corporation Limited (HSCC), National Projects Construction Corporation Limited (NPCC), THDC India Limited and North Eastern Electric Power Corporation Limited.
In addition, PSUs like IRCTC, HUDCO, Cochin Shipyard Limited, General Insurance Corporation, New India Assurance Company Limited, Mazagon Dock Shipbuilders Limited (MDL) and RailTel have been successfully listed on the stock exchange.
Read also | Economic Survey: Vaccination is key to opening up economy, not just health response
,