Government to review NITI Aayog’s proposals for strategic disinvestment -Governance Now

Government to review NITI Aayog’s proposals for strategic disinvestment

NITI Aayog had prepared two lists of loss-making state-run companies. One list was for those to be shut down and the other of those to be considered for strategic disinvestment

GN Bureau | August 2, 2016

#NMDC #Disinvestment #CCEA #Indian Oil Corporation #MMTC #NITI Aayog #PSU #SUUTI #UTI #Axis bank

The government will soon take up proposals for strategic disinvestment of central public sector undertakings, from the list submitted by the government think tank NITI Aayog.

A core group of secretaries on disinvestment, headed by the cabinet secretary, is considering the suggestions of the NITI Aayog and will take a view on a case-by-case basis.

After it gives the nod, the proposal will go to the cabinet committee on economic affairs (CCEA) for a final view after which the process of strategic stake sale will begin, according to a news report published in the Mint.

Earlier, NITI Aayog had submitted two lists to the government - one was of loss-making state-run companies to be shut down and another of those to be considered for strategic disinvestment. The lists have not been made public.

The government has set a divestment target of Rs 56,500 crore for the current fiscal, of which Rs 36,000 crore is expected to come from minority stake sales and Rs 20,500 crore to be raised through strategic sales in both profit-making and loss-making state-owned companies.

So far, it has managed to garner Rs 3,183 crore from minority stake sales in NHPC Ltd, Indian Oil Corporation Ltd and NTPC Ltd. Stake sale in two fertiliser companies, Rashtriya Chemicals and Fertilizers Ltd and National Fertilizers Ltd are also lined up. Also, it has announced its intention to sell stakes in iron ore mining company NMDC Ltd, state-owned trading firms MMTC Ltd and State Trading Corporation of India Ltd, and Oil India Ltd.

The government has also initiated the process of selling its remaining stakes in Specified Undertaking of the Unit Trust of India (SUUTI), an offshoot of the erstwhile state-run investment firm Unit Trust of India (UTI), by inviting bids from bankers for the mandate to manage the stake sales in ITC Ltd, Larsen and Toubro Ltd (L&T) and Axis Bank Ltd in the first phase within a period of three years. Bankers have been asked to submit their proposals by August 10. The government at present holds an 11.17 percent stake in ITC, 8.16 percent in L&T and 11.53 percent in Axis Bank. SUUTI’s holding in ITC is worth Rs 33,909 crore, in Axis Bank Rs 14,819 crore and in L&T Rs 12,058 crore.

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