GoM will decide PSU count in strategic sectors: DIPAM Secretary

February 4, 2021

Recently, the Department of Investment and Public Asset Management (DIPAM) stated that a panel of Ministers would take final decision regarding the number of public sector companies that will be retained in each of the strategic sectors. The panel of ministers will comprise of Nirmala Sitharaman, the Finance Minister and Nitin Gadkari, the Road Transport Minister.

Background

  • The finance minister recently, while presenting budget 2021, unveiled the government’s plan of the Disinvestment or the Strategic Disinvestment Policy.
  • The government also identified four strategic sectors, namely:
  1. Transport and Telecommunications;
  2. Power, Petroleum, Coal and other minerals;
  3. Atomic energy, Space and Defence; and
  4. Banking, Insurance and financial services.
  • In these sectors, bare minimum Central Public Sector Enterprises (CPSEs) would be maintained.
  • The government also highlighted that the CPSEs in other sectors would be privatised.

What is the Plan?

  • NITI Aayog will work on preparing the preliminary list of CPSEs. These lists could be taken up for strategic disinvestment. The strategic sectors list will be prepared on the basis of four groups:
  1. National security
  2. Critical infrastructure.
  3. Energy and minerals and
  4. Financial services.
  • The government has targeted to conclude the strategic sale of Air India, BPCL, Container Corporation of India, IDBI Bank, Shipping Corporation of India, Neelachal Ispat Nigam Ltd, Pawan Hans and BEML in the next fiscal.
  • The Initial Public Offering of LIC would also be launched.

Strategic Disinvestment

It means transfer of the ownership and control of the public sector entity to other entity. Usually, the ownership is transferred to a private sector entity. It is a king of privatization unlike the simple disinvestment where the government sale of assets to raise money.

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