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Only 8 PSUs’ disinvestment is complete out of 36 selected in 2016, govt tells Lok Sabha

In written reply, MoS Finance Bhagwat Karad listed status of every PSU that was selected. He explained why process has been halted in some, while others are caught in litigation.

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New Delhi: The Narendra Modi government told the Lok Sabha Monday that of the 36 PSUs (public sector units, also known as Central Public Sector Enterprises or CPSEs) that it had listed for disinvestment in 2016, the process has been completed for just eight.

Two transactions have been held up because of litigation, while five PSUs have been recommended for closure, thereby halting the disinvestment process. The units of one PSU are now being returned to the respective state governments.

The eight PSUs whose disinvestment has been completed are Hindustan Petroleum Corporation Ltd, Rural Electrification Corporation Limited, HSCC India Ltd, National Project Construction Corporation Limited, Dredging Corporation of India Ltd, THDC India Ltd, North-Eastern Electric Power Corporation Limited, and Kamarajar Port Limited.

The answers were provided by Minister of State for Finance Dr Bhagwat Kishanrao Karad, in response to an unstarred question from Trinamool Congress MP Mala Roy. 

Karad also said that since 2016, while the government has given ‘in-principle’ approval for strategic disinvestment of 36 CPSEs and/or subsidiaries/units/joint ventures of CPSEs and banks, the execution depends on how the market is poised. 

“The execution and outcome of disinvestment transactions inter alia depends on the prevailing market conditions and bidders’ interest,” the minister said.

Also read: Budget’s disinvestment targets are heroic. Modi govt must show unprecedented transparency

Strategic Disinvestment Policy

According to the Department of Investment and Public Asset Management (DIPAM) website, “strategic disinvestment of CPSEs lies at the heart of the disinvestment policy”.

“Strategic disinvestment would imply the sale of a substantial portion of the government shareholding of a CPSE of up to 50 per cent, or such higher percentage as the competent authority may determine, along with transfer of management control,” it states. 

The disinvestment targets are revised annually. In June, Chief Economic Advisor Krishnamurthy Subramanian had said the Rs 1.75 lakh crore disinvestment target for the current fiscal is on track.

‘18 transactions are ongoing’

In his reply, Minister Karad said there are 18 ongoing transactions that are being processed by DIPAM. Of these, a strategic buyer has been selected for Air India, Air India Express Limited and Central Electronics Limited. 

For the first two, Tata has been selected as the buyer, and the group is expected to take over Air India by the third week of January 2022. 

The disinvestment of Alloy Steels Plant, Durgapur, has been halted for the time being, while the disinvestment of the Bharat Petroleum Corporation Limited’s stake in the Numaligarh Refinery Limited to a strategic buyer has been completed.

The other PSUs that are still in process of disinvestment are Project and Development India Ltd, Engineering Project India Ltd, Bridge and Roof Co. India Ltd, BEML Ltd, Ferro Scrap Nigam Limited, Nagar Steel Plant of NMDC Ltd, Salem Steel Plant, Bhadravati Steel Plant (both units of the Steel Authority of India Ltd), Pawan Hans Ltd, HLL Lifecare Ltd, Indian Medicines Pharmaceuticals Corporation Ltd, Bharat Petroleum Corp Ltd, The Shipping Corporation of India Ltd, Container Corporation of India Ltd, NeelaChal Ispat Nigam Ltd, Rashtriya Ispat Nigam Limited and IDBI Bank.

The disinvestment of various units of the India Tourism Development Corporation Ltd, Hindustan Antibiotics Ltd and Bengal Chemicals and Pharmaceuticals Ltd are being handled by the respective ministries — the Union tourism ministry for the first and the Union ministry of chemicals and fertilisers for the other two. 

The strategic sale of Hindustan Newsprint Ltd and Karnataka Antibiotics and Pharmaceuticals Ltd is caught in litigation. Some other disinvestments have been halted as the CPSEs are slated to be closed. 

Hindustan Prefeb Ltd has been recommended for closure, while a similar recommendation has been accepted for Hindustan Fluorocarbons Ltd, Scooters India Ltd and Bharat Pumps and Compressors Ltd. 

The mines of the Cement Corporation of India Ltd are being returned to state governments as the transaction is “not feasible”, the minister added. 

(Edited by Saikat Niyogi)

Also read: Modi govt has ‘clear and transparent’ disinvestment policy, says Anurag Thakur


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