Cabinet expected to clear stake sale in 20 PSUs -Governance Now

Cabinet expected to clear stake sale in 20 PSUs

There would also be detailed review on the plan to shed 10 percent stake in public sector insurance companies

GN Bureau | October 18, 2016

#PSUs #stake sale #Container Corporation #Bharat Earth Movers #Scooters India #Niti Aayog

The cabinet is expected to clear the plan to cut majority stake in around 20 state-run enterprises on Wednesday. These also include several profit-making companies, signalling a restart of equity sale in public sector undertakings (PSUs) after a gap of 12 years.

Also, there would be a detailed review of the plan to shed 10 percent stake in public sector general insurance companies. This is aimed at helping the insurers raise funds to take on private sector players, according to a news report published in Times of India. The PSUs identified include profit making Bharat Earth Movers and others such as loss-making Scooters India.

NITI Aayog, the government think-tank that firmed up the disinvestment policy for the Narendra Modi government, had recommended strategic sale in several PSUs, that would result in bringing down the centre's share in these companies to under 50 percent.

Niti Aayog has argued that this model will help maximise revenue, while focusing on strategic sectors such as oil or segments where the government wants to avoid a dominant role of the private sector. As a result, the move to shed stake in Container Corporation (Concor) where the government holds nearly 57 percent stake, through the "strategic sale" route, was dropped. Concor controls nearly three-fourths of the market and is seen to be a vital link in the government's efforts to boost the logistics network.

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