Strategic disinvestment of Scooters India on cards

Despite various revival attempts, the company has incurred losses over a long period and was eventually declared sick

GN Bureau | September 17, 2016


#Scooters India   #disinvestment   #losses   #heavy industries ministry  

 Heavy industries ministry is likely to seek cabinet approval for "strategic disinvestment" of loss making automaker Scooters India Limited. The strategic disinvestment means sale of substantial portion of government’s shareholding in the CPSE up to 50 percent or more, along with the transfer of management control.

 The disinvestment of Scooters India has been talked about in the past as well but successive governments could not implement the plan due to divergent views among various stakeholders.
 
 Despite government's revival attempts, including sanctioning a financial package, the company has incurred losses over a long period and was eventually declared sick. Scooters India used to manufacture the popular Lambretta scooters.
 
 Government's think tank NITI Aayog had recently submitted two separate lists of sick and loss-making PSUs - one comprising those that can be closed down and the other of those where government can divest its stake. This fiscal, the government aims to collect Rs 56,500 crore through disinvestment in PSUs. Of the total budgeted proceeds, Rs 36,000 crore is estimated to come from minority stake sale in PSUs and the remaining Rs 20,500 crore from strategic sale in both profit and loss-making companies. 
 
In 2015-16, the government raised less than half of the disinvestment estimates at Rs 25,312 crore against the target of Rs 69,500 crore. It had raised around Rs 24,500 crore in 2014-15 by selling stake in public companies, about Rs 16,000 crore in 2013-14 and Rs 23,960 crore in 2012-13.
 

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