Cabinet’s nod for Niti Aayog’s proposal for PSU strategic stake -Governance Now

Cabinet’s nod for Niti Aayog’s proposal for PSU strategic stake

The government has budgeted to raise Rs 20,500 crore through strategic stake sale of PSUs

GN Bureau | October 28, 2016

#strategic sale #Niti Aayog #Arun Jaitley #Niti Aayog #PSU

The union cabinet chaired by prime minister c has given in-principle approval to Niti Aayog’s proposal for strategic sale in public sector undertakings (PSUs), on Thursday. The Cabinet meeting also decided that the department of investment and public asset management (DIPAM) would work out the broad methodology and valuation and therefore would fix the base price for each of the PSU being put up for strategic sale.

However, finance minister Arun Jaitley said that the names of PSUs that are up for strategic stake sale would be made public on a case-to-case basis once the cabinet decides to put them up for the auction.

He also said that the recommendations of the NITI Aayog on both disinvestment and strategic sale came up for consideration. In-principle the cabinet approved the recommendations with regard to some of the units, he added.

The government has budgeted to raise Rs 20,500 crore through strategic stake sale of PSUs, but Jaitley said it would not rush to sell the companies in order to achieve the target.

"At the moment we are at the mid-point of the year and this year we have already made a significant headway in disinvestment... I am not going to allow it (PSUs) to be under sold merely because there is a calendar limitation," he said.

Besides strategic sale, government also plans to raise Rs 36,000 crore through PSU minority stake sale. It has already raised Rs 8,632 crore through share buyback and Offer for Sale.

Jaitley said each PSU would be examined separately by DIPAM and the administrative ministry concerned and then a final view would be taken by the Cabinet on strategic sale.

Minister said that the cabinet did not discuss NITI Aayog's list of PSUs which could be closed down. Jaitley further said the valuation of the PSUs up for strategic sale will also take into account immovable property and other assets.

NITI Aayog had submitted a list of public sector units where the government can sell its majority stake to private companies in order to bring in greater efficiency and professionalism in their functioning

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