The Union Cabinet on Wednesday took several decisions that would see it significantly reducing its shareholding, and in some cases cede management control, in a number of public sector enterprises, Finance Minister Nirmala Sitharaman announced.
The Cabinet approved the government’s proposal to reduce its shareholding in certain public sector enterprises to below 51% but still retaining management control on a case-by-case basis. The government had previously announced its decision to reduce its stake in some public sector companies while retaining management control through the shares in that company held by other PSUs. The Finance Minister did not name the companies that would undergo such a stake sale.
The Cabinet also gave its in-principle approval for the privatisation or stake sale in five public sector enterprises and also the handing over of management control of these companies to the buyers.
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The government will sell its entire 53.29% stake in Bharat Petroleum Corporation Limited. However, Ms. Sitharaman said BPCL’s 61.65% share in Numaligarh Refinery Limited will be transferred to a public sector company operating in the oil and gas space.
The government will also sell its entire 63.75% stake in Shipping Corporation of India and will cede management control to the strategic buyer. Similarly, it will sell its 30.8% stake in the Container Corporation of India and hand over management control to the buyer.
Ms. Sitharaman also announced that the government would sell its entire 74.23% stake in THDCIL and its 100% stake in North Eastern Electric Power Corporation to NTPC Ltd. Both firms will also see cede management control to NTPC.
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“The resources unlocked by the strategic disinvestment of these CPSEs would be used to finance the social sector/developmental programmes of the Government benefiting the public,” the government said in a release.
“The unlocked resources would form part of the budget and the usage would come to scrutiny of the public. It is expected that the strategic buyer/acquirer may bring in new management/technology/investment for the growth of these companies and may use innovative methods for their development.”
The Cabinet also approved the introduction of the International Financial Services Centres Authority Bill, 2019 in the Lok Sabha in the ongoing session of the Parliament.
If passed, the Bill will see the merging of eight different sector regulators for the international financial services centres into a single entity.
The government has set a disinvestment target of ₹1.05 lakh crore for the current financial year. So far, it has managed to collect only ₹17,364.26 crore, according to a Lok Sabha answer. on November 18, 2019.