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

How much time do you spend talking on phone?

How much time do Indians spend talking on phone? It is on average 761 minutes per month, according to a new report from the Telecom Regulatory Authority of India (TRAI). The telecom regulator released its report, titled ‘The Indian Telecom Services Performance Indicators: July-Septemb

“Developing public health infrastructure key to sustainable healthcare for all”

Renowned cardiologist Dr Ramakanta Panda has said that the pandemic has exposed the inadequacy of existing healthcare systems and it is wrong to draw comparisons with Korea, a country with the population equal to that of a single Indian state. While speaking to Kailashnath Adhikari, MD, Gove

SC-appointed panel on farm laws holds first meet

The committee of experts appointed by the supreme court to deliberate with the stakeholders on the new farm laws held its first meeting here Tuesday, with one of its members saying that all stakeholders, including individual farmers, will be heard. Hearing a petition on the farm laws enacted

India’s glitch-free vaccination gathers pace

The nationwide vaccination campaign launched Saturday, the largest such exercise in the world, has started setting new benchmarks, with vaccines administered to 2,24,301 beneficiaries in the first two days. “India has vaccinated the highest number of persons on Day1 under its COVID19 v

Maharashtra to spend Rs 2,500 crore to augment, develop power infrastructure

The Maharashtra government has announced a spending of Rs 2,500 crore annually to develop infrastructure of state-owned distribution company Mahavitaran (MSEDCL).   Out of the total amount, Rs 1,500 crore will be spent on energisation of conventional agriculture pumps and Rs 1,000 crore

Launched: Largest vaccination drive in history

India on Saturday began the massive vaccination drive against Covid-19, as prime minister Narendra Modi paid tributes the ‘corona warriors’. “Such a vaccination drive at such a massive scale was never conducted in history. There are over 100 countries having less than 3 cro

Visionary Talk with Dr Ramakanta Panda, VC & MD Asian Heart Institute





Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter