Final policy on strategic sales in PSUs likely by month-end

The policy on strategic sales in public sector enterprises is likely to include options of a full exit, sale of majority stake or a management transfer in loss making as well as profitable units in non-core sectors, among others.

The Finance Ministry, which is finalising the policy, is also reviewing the earlier proposal to revive the erstwhile Disinvestment Commission and instead continue with the existing system with minor modifications. At present, the Department of Disinvestment in the Ministry of Finance and the nodal Ministry work out the minority sale strategy. The final policy is likely to be announced by the end of the month, said a senior government official, adding that strategic sales would be taken up in 2016-17.

When contacted, Neeraj Kumar Gupta, Secretary, Department of Disinvestment, said, “The policy is going to be put in place very soon. It will take into consideration all aspects of strategic sales including identification of central public sector units, valuations and transaction in a transparent and efficient manner.”

While declining to give specific details of the policy including the revival of Disinvestment Commission, he told BusinessLine , “No firm decision has been taken. Besides, there is a lot of information with administrative ministries, the Department of Public Enterprises and the Department of Disinvestment which can be put to use.”

Sources said the policy will be in line with Prime Minister Narendra Modi’s plan to corporatise PSUs and improve their financial and operational viability while exiting non-core businesses where the government has a presence. “There will be a three-pronged policy regarding PSUs to ensure that they are an enabler for growth rather than a drain on the economy. This will entail improving their performance; minority stake sales to increase public participation and finally strategic sales in some firms,” said the first official, on conditions of anonymity.

Finance Minister Arun Jaitley had in the Union Budget 2015-16 announced that the government would go ahead with strategic sales in PSUs and had set aside and had targeted raising ₹28,500 crore from the exercise this fiscal.

However, the government has been unable to go ahead with majority stake sales due to volatile market conditions coupled with the absence of a concrete policy for such transactions.

COMMENT NOW