Somanathan: New Finance secretary

The Expenditure Secretary T V Somanathan was recently designated as the Finance Secretary by the Appointments Committee of the Cabinet.

About T V Somanathan

Currently he is the senior most officer among all the secretaries in the Ministry of Finance. He is a 1987 batch Indian Administrative Service Officer of Tamil Nadu cadre.

Tuhin Kanta Pandey is the current Secretary of Department of Investment Public Asset Management (DIPAM). Ajay Seth is the current secretary of Department of Economic Affairs.

DIPAM

The Department of Disinvestment was renamed as DIPAM. DIPAM aims in efficient management of investments of the Central Government and also its disinvestments.

Currently the Government of India is pursuing disinvestment to enhance its efficiency and not to vacate the public sector. The current disinvestment policy aims at the following:

  • To minimize the interference
  • To allow public sector units to function along with the commercial principles
  • To permit managerial autonomy in decision making.

Difference between Privatisation and Disinvestment in India

If the sales of equity of a Public Sector Unit is greater than 50% it is called privatisation. On the other hand, disinvestment is when the Government sells only a part of its stake in the PSU and retains majority of the shares. Disinvestment is basically done to tinker the PSU. Tinkering is repairing or improving something.

Why is Disinvestment important?

  • Disinvestment reduces the financial burden of inefficient PSUs. This is done to improve public finances.
  • NITI Aayog makes recommendations about loss making units. It values the assets of these units to carry out possible strategic sales.

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