Modi’s statement on PSU show preference for revival

Finance minister Arun Jaitley has budgeted an ambitious disinvestment target of Rs 56,500 crore for FY17

GN Bureau | August 16, 2016


#Arun Jaitley   #Narendra Modi   #PSU  

Prime minister Narendra Modi, during his independence day speech on Monday, said that public-sector behemoths like Air India and BSNL are now making profits. His reference to turning around of loss-making central public sector enterprises (CPSEs) could be an indication that this government has greater confidence in reviving loss-making CPSEs rather than selling them, according to a report by Business Standard.

“In our country, the PSUs are formed to fall in a pit, to fail, to get locked out or to be sold out. That has been the history,” Modi said. “We have tried to bring in a new culture. And today, for the first time, I can say with satisfaction that Air India, which had a bad image, has succeeded in registering an operational profit last year. At a time when telecom companies all over the world were earning, BSNL was falling in a pit. For the first time, BSNL has succeeded in earning operational profit.”

Finance minister Arun Jaitley has budgeted a rather ambitious disinvestment target of Rs 56,500 crore for FY17. Out of which, Rs 36,000 crore is expected to come from the reduction in the centre's stake in listed PSUs through stake sales and buybacks. As much as Rs 20,500 crore is expected to come from strategic sales. The rather long process of strategic sales involves NITI Aayog, department of investment and public asset management (DIPAM), line ministries and the Cabinet, the report added.

On the minority stake sale front, DIPAM has already appointed merchant bankers for Cochin Shipyard, HUDCO, ITDC, NBCC, State Trading Corp, SUUTI, MMTC, National Fertilizers, NMDC, Oil India, Rashtriya Chemicals and others. Additionally, new PSU guidelines demand that every CPSE with a net worth of at least Rs 2,000 crore, and cash and bank balance of Rs 1,000 crore will buy back shares. Coal India, NMDC, Nalco, MOIL and Bharat Electronics have already cleared buybacks and other big PSUs are expected to follow suit.

The report further said that on the strategic sale front, there seems to be a lot of confusion, contrasting reports and lack of clarity, especially when it comes to NITI Aayog's role. The Aayog has been tasked with identifying with the PSUs for strategic sale, advising the government on mode of sale, and suggesting methods on valuation of the company.
 

Comments

 

Other News

FM concludes pre-budget consultations

Union minister for finance and corporate affairs Nirmala Sitharaman has concluded the pre-budget consultation meetings for Budget 2023-24 that were held from November 21 to 28 in the virtual mode. More than 110 invitees representing seven stakeholder groups participated in eight meetings sch

Coal production rises by 18% to 448 MT

The total coal production in the country stands at 448 million tonnes (MT) for the month of October 2022 which is 18% higher than the production of the corresponding period of last year. The growth of coal production from Coal India Ltd (CIL) is also more than 17%. The ministry of coal said

How to execute large-scale social impact projects

The number of social innovators and entrepreneurs has considerably increased recently in India. The idea of social entrepreneurship, which aspires to provide novel solutions for the world`s most critical social issues, is now receiving more attention. Challenges like overworked healthcare,

Plastic is no longer a waste management issue

Plastic is arguably the most ubiquitous material of our times. In this Age of Plastic, it might seem its use can’t go up any further – and yet it keeps going. Between 2000 and 2015, global production of plastic increased by a whopping 79%. The total mass of plastics on our planet is now twice t

Celebrating the Ganit of Protein!

“Why is the child growing?” is the question that bothers a lot many in the administration. The answer, to be honest, is to be discovered via science, and less via what we call ‘effective administration’. Eventually, it will be the latter that will enforce the former on the field, bu

Trying to achieve work-life balance? Here’s some advice

The untapped potential of every individual is the biggest tragedy of the human race. The primary reason for this is our lack of awareness of the processes, tools and t

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter