Centre for in-principle share sale in ‘some’ PSUs

October 27, 2016 11:21 pm | Updated December 02, 2016 12:03 pm IST

NEW DELHI: The Centre made a cautious move towards large scale disinvestment of public sector enterprises with the Cabinet agreeing ‘in-principle’ to a ‘case-by-case’ examination of just ‘some’ of the 20-odd firms and units recommended for strategic sale by its think-tank Niti Aayog.

Finance Minister Arun Jaitley said the strategic sale of such public sector units with the transfer of management control to a private entity, will be taken up subsequently by the cabinet on a case-by-case basis after consultations with their respective administrative ministries, but there’s no timeline set for the process.

“The recommendations of the Niti Aayog with regard to both disinvestment and strategic sales came up for consideration before the cabinet,” Mr. Jaitley said. “In principle, the cabinet approved the recommendations with regard to some of the units about which the recommendations were made.” he said, adding that closure of public sector units was being considered separately.

The Centre had set a target to raise Rs.20,500 crore in 2017-18 through strategic sales of public sector firm and another Rs.36,000 crore is to be raised from the sale of minority stakes in PSUs.

“There is no timeline for this…We will look at the best possible timing that could give us the best possible price. I am not going to let something be undersold just because of a calendar limit,” Mr Jaitley said, stressing that the government has already made significant headway on its disinvestment targets in the first half of the year.

Last month, the Cabinet granted an ‘in-principle nod’ for the sale of loss-making Allahabad-based firm Bharat Pumps and Compressors Limited – the first such approval since the sale of Kolkata-based Jessop & Co. in 2003-04 under the Atal Behari Vajpayee-led NDA government.

When asked about Niti Aayog’s disinvestment proposals that include a recommendation to divest loss-making units of public sector steel major SAIL, Steel Minister Chaudhary Birender Singh said last week that discussions are underway and there is a need to understand the factors plaguing specific units of SAIL such as high power tariffs. If they were unviable owing to such factors, change of management won’t help, he had indicated.

On Thursday, Mr Jaitley acknowledged that some of the units recommended for sale by the Aayog are ‘important’ and each unit will be considered on ‘its own merit’ with the timing of the sale to be decided accordingly. He also assured that settled valuation procedures will be followed in a transparent process for such transactions.

“Needless to say, it will be transparent. If there is a unit with large chunks of immovable property, even if it is loss-making, the valuation would take into account the property,” the finance minister said.

The Department of Investment and Public Assets Management and the administrative ministries in charge of the specific PSUs would now undertake a detailed examination óf each firm and finalise the methodology to be followed and the base price for a sale, before bringing individual proposals to the Cabinet.

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