New Delhi: The government has unveiled a new public sector companies policy for non-strategic sectors so that the Department of Public Enterprises (DPE)DPE) may promote privatization or closure of state-run firms. In cases where the liabilities are “excessively high”, the government has indicated its willingness to go for the Insolvency and Bankruptcy Code (IBC) way too.
The criteria stipulate that the entire process of closure must be completed within nine months of approval by the Cabinet Committee on Economic Affairs (CCEA,
The move follows a policy announcement by the Finance Minister on non-core sectors Nirmala Sitharaman In the last budget, to be implemented for PSUs in sectors other than nuclear power, space, defence, transport, telecommunications, energy and minerals and financial services. The policy clearly states that in cases where a director or head PSU fails to cooperate, the government will have the right to replace him with a joint secretary rank from the department concerned, which was seen as a clear message to the brass.
The release of the policy met with opposition to the government’s plan to privatize state-run banks, suggesting that the Center is in no mood to go soft. This scheme will be beneficial for many companies which were proposed to be sold by the government but have not been able to find buyers for the past several years.
The DPE has been entrusted with the task of preparing a list of companies that would be taken up for closure and disinvestment in consultation with the administrative ministry. Niti AayogDIPAM and Expenditure Department. Once approved by the CCEA, it will also undertake the process of closure, including ceiling on receipts and necessary budgetary support to clear statutory and other dues including employees.
The criteria stipulate that the entire process of closure must be completed within nine months of approval by the Cabinet Committee on Economic Affairs (CCEA,
The move follows a policy announcement by the Finance Minister on non-core sectors Nirmala Sitharaman In the last budget, to be implemented for PSUs in sectors other than nuclear power, space, defence, transport, telecommunications, energy and minerals and financial services. The policy clearly states that in cases where a director or head PSU fails to cooperate, the government will have the right to replace him with a joint secretary rank from the department concerned, which was seen as a clear message to the brass.
The release of the policy met with opposition to the government’s plan to privatize state-run banks, suggesting that the Center is in no mood to go soft. This scheme will be beneficial for many companies which were proposed to be sold by the government but have not been able to find buyers for the past several years.
The DPE has been entrusted with the task of preparing a list of companies that would be taken up for closure and disinvestment in consultation with the administrative ministry. Niti AayogDIPAM and Expenditure Department. Once approved by the CCEA, it will also undertake the process of closure, including ceiling on receipts and necessary budgetary support to clear statutory and other dues including employees.
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